economic

Indonesian President Prabowo Subianto unveiled ambitious economic growth and fiscal deficit targets for 2027 while promising reforms aimed at restoring investor confidence and strengthening state institutions. The announcement comes after months of market concerns over government spending plans, policy uncertainty, and weakening confidence in Southeast Asia’s largest economy.

Government Sets Ambitious Economic Targets

Prabowo outlined a growth target of 5.8 percent to 6.5 percent for next year while aiming to lower the fiscal deficit to between 1.8 percent and 2.4 percent of gross domestic product. The government also expects inflation to remain under control and pledged to improve food security and attract greater investment.

Investor Confidence Faces Pressure

Indonesia has faced growing scrutiny from investors and rating agencies this year. Credit rating outlooks were downgraded due to concerns about policymaking credibility, fiscal discipline, and transparency. Market fears intensified after discussions around possible changes to the country’s long standing fiscal deficit ceiling and rising state spending commitments.

Commodity Control Plan Sparks Market Concerns

Prabowo confirmed plans to establish a new state agency to oversee exports of major commodities including coal, palm oil, and nickel. The government says the move is intended to reduce revenue losses and strengthen national control over natural resources, but investors worry it could disrupt pricing systems and reduce private sector profitability.

Private Sector Role Remains Important

Despite increasing state involvement in strategic sectors, Prabowo stressed that Indonesia still welcomes private companies and small businesses as partners in economic development. He called for cooperation between the government and the private sector to achieve long term prosperity.

Analysis

Indonesia’s latest economic strategy reflects a balancing act between ambitious state led development goals and the need to maintain investor confidence. While the government aims to accelerate growth and strengthen control over key resources, markets remain cautious about rising fiscal risks and unpredictable policy changes.

The proposed commodity export agency could significantly reshape Indonesia’s role in global resource markets because the country is one of the world’s largest exporters of coal and palm oil. However, stronger government intervention may create uncertainty for foreign investors and commodity traders.

At the same time, maintaining fiscal discipline will be critical as Prabowo moves forward with large welfare programmes and economic reforms. The success of his agenda will likely depend on whether the government can reassure markets while delivering growth, stability, and stronger institutional credibility.

With information from Reuters.

Tragic flooding has swept through communities in Douala, Cameroon’s economic capital. On  Monday, May 18, the disastrous incident caused a five-year-old child to drown as heavy torrential rains led to severe flooding in the country’s economic hub. 

The child was swept away in the Banya-Sable area, located in Douala’s 5th district.

“Trapped by the rapidly rising waters, the child was carried off by a strong current. The body was recovered a short time later and taken by the parents to the Ad Lucem hospital, where the death was confirmed,” said Nana Paul Sabin, an eyewitness.

The flooding affected the 5th, 4th, 3rd, and 2nd administrative districts, as well as residential and administrative areas such as Bonapriso and Bonanjo in Douala’s 1st district.

“The floods caused significant disruptions and blockages in traffic, and in certain locations, the water levels rose alarmingly due to drainage issues,” a resident from Douala’s 3rd district stated.

In response, the Douala Urban Council issued a statement urging residents to exercise caution in their daily activities. The council advised individuals in high-risk areas to limit non-essential travel, avoid flood currents, stay clear of unstable structures, and be especially vigilant with children.

“The Douala Urban Council also emphasises the importance of keeping drainage pathways clear and encourages civic responsibility to help preserve lives,” the communiqué read. 

It also noted that technical teams have been deployed to address the aftermath of the heavy rainfall.

“Let us stay alert, united, and responsible,” the statement concluded.

Optimism has been the name of the game since Operation Absolute Resolve took Maduro out. Such optimism doesn’t just come from Venezuelans, where polls showed support for the intervention, but also from the investment community, which has flocked into the country to assess all kinds of opportunities. Since then, oil revenues have increased, driven not just by output increments but also by favourable price tailwinds and sanctions relief, which meant the reintroduction of Venezuelan crude into the global market. Today, Venezuela is the second largest source of imported crude in the United States, something unthinkable five months ago.

The petro dollars haven’t come in by themselves. A mechanism was designed so American officials could control how and where those funds would be deployed in order to avoid the disappearance of half of all oil revenues, as was the case under the previous administration. Additionally, licenses were granted to the BCV, new laws were passed for the hydrocarbon and mining sectors, with new MoUs being signed with international energy companies. Even macroeconomic data sets have been released for the first time in over a decade. So much appears to have changed that even multilaterals (chiefly the IMF) reemerged as crucial partners for a potential debt restructuring and stabilization program. Optimism is granted and the illusion of recovery does not come without merit, given the changes the country has experienced in less than five months.

However, that mirage breaks against the harsh reality on the ground and macroeconomic indicators that tell a different story. A year-to-date inflation of 90%, a 70% depreciation of the official exchange rate, and a widening gap between multiple dollar rates that continues to punish businesses and individuals alike. Meanwhile, the Bolívar printing press is working overtime while BCV reserves remain flat, deepening macroeconomic uncertainty and destroying what little credibility the institution still retained.

The almighty bond market will need far more than an Instagram post to bite the bait. Sovereign creditors respond to numbers, rules, and enforceability. Venezuela remains deeply deficient on those fronts.

None of this reflects an economy that is stabilizing, despite the interim authorities having a golden opportunity to do so. Instead, it reflects a government trying to politically manage deterioration without implementing the reforms necessary to stop it. 

The current model is not designed to solve the crisis but to preserve political control while generating just enough liquidity, oil revenue, and international flexibility to postpone its inevitable collapse. The interim authorities continue to rely on the same mechanisms that created the disaster in the first place with an unsustainable monetary expansion, exchange-rate distortions, opaque fiscal management, and complete control over all institutions. So while oil revenues and external prospects may have improved, the underlying structure of the economy remains unchanged. 

Refusing to address the obvious

A country benefiting from stronger revenues should be rebuilding reserve buffers and restoring institutional confidence, and prioritizing the reconstruction of the essential services. Instead, every dollar is consumed by a State that remains just too large, too inefficient, and politically unwilling to reform. The central bank continues injecting Bolívares into an economy where there is effectively no confidence that the currency can preserve value over time, nor in the institutional capacity to sustain credible long-term policy.

This lack of confidence is central to understanding our persistent inflation problem. It is not solely driven by the irresponsible monetary expansion but by high money velocity resulting from the complete lack of credibility in our currency. As soon as businesses and individuals receive Bolívars, they rush to buy dollars, inventory, or any asset capable of preserving value, accelerating velocity and pushing inflation into a spiral. This is not speculation; it is rational economic behavior in response to the collapse of trust in the Bolívar. Without restoring that confidence, inflation will remain entrenched.

The foreign exchange market remains one of the clearest indicators of the country’s fragility. As the gap between the official and parallel rate distort prices throughout the economy. The widening gap between the official and parallel exchange rates distorts prices across the economy, leaving businesses struggling to establish stable cost structures or expansion plans. International investors also face enormous uncertainty regarding how those multiple rates affect their ability to move capital in and out of the country. Meanwhile, the BCV continues wasting precious dollar inflows trying to defend an artificial exchange rate that is fundamentally unsustainable. 

Without institutional legitimacy, no restructuring effort or investment cycle will prove durable or beneficial for the country.

Addressing these distortions may still be too politically costly for Rodriguez. Closing the gap would require a fiscal discipline alien to chavismo, while also dismantling one of the most important corruption mechanisms for rewarding insiders. 

The solution appears straightforward: transition toward a system in which dollar-auction pricing is transparent and the USD is allowed to float. Furthermore, the government should let the dollars circulate freely, letting businesses and individuals use the greenback for both transactions and contract setting. While alleviating the economic distortions, this will also contribute to slowing the velocity, and keeping inflation under control. Venezuela should pursue this approach while keeping the Bolívar alive so it can gradually recover credibility through discipline and a coherent fiscal and monetary framework. 

Yet the changes necessary to stabilize the economy are the same changes that would reduce the government’s discretionary control over the economy. As previously argued, setting an independent board in the likes of Petroleos de Venezuela or the Venezuelan Central Bank would threaten the political hegemony of the interim authorities across all institutions.

What sound debt restructuring implies

The next collision with reality, where fundamental flaws will be hard to conceal, lies in the newly announced debt restructuring process. Interim authorities are about to face the almighty bond market which will need far more than an Instagram post to bite the bait. Sovereign creditors respond to numbers, rules, and enforceability. And on those fronts, Venezuela remains deeply deficient.

Venezuela’s total debt is estimated at $200 billion or about 200% of GDP. Despite Venezuela receiving a license to be able to hire Centerview, one of the most prestigious boutique firms in the market, any meaningful and fair progress would be impossible without a coherent macroeconomic plan bound by institutional legitimacy and backed by multilateral oversight, particularly from the IMF.

For Venezuela to avoid setting itself up for failure through a restructuring process that could hinder its financial capacity to grow sustainably, the Fund becomes an indispensable partner. The IMF would need to conduct an assessment of the country’s current financial stance via an Article IV consultation that hasn’t been conducted since Chavez withdrew from the organization. This assessment would be a key piece in understanding Venezuela’s repayment capacity and debt sustainability, setting the base from where to negotiate towards an agreeable debt haircut, tenor, and coupon.

Nothing will come out of the great opportunity created by the January events if there is no fundamental change over the who and hows of economic management.

An IMF-backed restructuring would eventually demand fiscal transparency, monetary discipline, reserve accumulation, independent oversight, and credible institutional reforms. Additionally, creditors will call for legal certainty and enforceable agreements that provide confidence that rules will not arbitrarily change once capital enters the country, or years later when investors seek to exit . To provide such guarantees, Venezuela would need a legitimate political and legal framework capable of signing long-term agreements recognized both domestically and internationally 

Without institutional legitimacy, no restructuring effort or investment cycle will prove durable or beneficial for the country. Proceeding without these elements would leave the country exposed to holdout creditors and future arbitration battles. The cornerstone for avoiding that is a credible electoral timeline that renews and legitimizes the National Assembly and executive power.

Yet that process is also set to collide with the interim authorities’ apparent intention to manipulate political timing in their favor. The current leadership wants the benefits of the stability phase brought in by oil revenue, sanctions relief, and fresh capital without surrendering the mechanisms of control that produced the crisis in the first place.

That formula is destined to fail. The authorities are neither serious enough nor committed to making the necessary reforms. In the meantime, we can keep going over the distortion caused by the exchange rate, what new law is being proposed or the deceiving debt announcement from last week. But nothing will come out of the great opportunity created by the January events if there is no fundamental change over the who and hows of economic management.

Finance ministers from the Group of Seven met in Paris to address rising global financial instability triggered by a bond market selloff and concerns over inflation linked to the ongoing conflict involving Iran.

The meeting comes at a time when global bond markets from Tokyo to New York are under pressure, as investors anticipate that higher energy prices could force central banks to maintain or increase interest rates.

Officials are also preparing for a broader discussion on structural global imbalances and coordination ahead of an upcoming G7 leaders summit.

Bond Market Pressure and Inflation Concerns

Bond yields have risen sharply across major economies as investors reassess inflation risks. Markets are increasingly focused on whether rising energy costs will translate into sustained price pressures that limit the ability of central banks to ease policy.

French officials have described the current situation as a correction rather than a crisis, though they acknowledge growing sensitivity around sovereign debt levels and fiscal sustainability.

The volatility has raised concerns particularly in highly debt sensitive economies such as Japan, where bond market movements are closely watched for spillover effects.

Diverging Views Within the G7

Despite the shared concerns, divisions remain among G7 members over how to respond to global economic instability.

European officials have emphasized the need for coordinated, temporary, and targeted responses to market shocks, while acknowledging that consensus with the United States may be difficult.

Some members argue that global economic imbalances are becoming structurally entrenched, with consumption and investment patterns increasingly misaligned across major economies.

Global Imbalances and Structural Concerns

A central focus of the discussions is the growing imbalance in global economic activity. European officials argue that long term trends show excessive consumption in some economies, under consumption in others, and insufficient investment in parts of Europe.

These structural disparities are seen as contributing to persistent trade tensions, capital flow imbalances, and financial market instability.

Officials warn that without coordinated policy responses, these imbalances could eventually lead to more severe market corrections.

Critical Minerals and Supply Chain Strategy

Another key agenda item is the global competition over critical minerals and rare earth supply chains, which are essential for electric vehicles, renewable energy systems, and defense technologies.

G7 members are exploring ways to reduce dependence on dominant suppliers, particularly China, through coordinated investment, joint procurement strategies, and diversification of supply chains.

Proposals under discussion include pooled purchasing mechanisms, market monitoring systems, and industrial policy coordination to strengthen supply security.

Analysis

The G7 meeting highlights a convergence of financial instability and geopolitical fragmentation. Rising bond yields and inflation fears are no longer isolated market issues but are now directly linked to geopolitical disruptions in energy supply and global trade routes.

At the same time, disagreements within the G7 reflect deeper structural tensions in the global economy, particularly around debt levels, consumption patterns, and industrial policy priorities.

Efforts to coordinate on critical minerals signal a shift toward more strategic economic alignment among advanced economies, where supply chain security is becoming as important as price stability.

Overall, the meeting underscores a global transition toward a more fragmented and politically driven financial system, where economic coordination is increasingly shaped by geopolitical risk rather than purely market based forces.

With information from Reuters.

Hundreds of Tunisians have marched through the capital to denounce a worsening economic crisis and what they say is a widening crackdown on dissent. President Kais Saied is accused of undermining the country’s hard-won post-2011 revolution system.

Walt Disney Co.’s theme parks and cruise line business is holding steady despite national concerns about discretionary consumer spending and higher gas prices.

The Burbank media and entertainment giant’s experiences division reported $9.5 billion in revenue in its fiscal second quarter, up 7% compared with the same period a year ago.

The increase was due to higher guest spending at Disney’s domestic parks and experiences, which reported a 6% bump in revenue to $6.9 billion, and more capacity on the company’s cruise line with the introduction of two new ships. The segment saw a 5% increase in operating income to $2.6 billion for the three-month period that ended March 28.

Disney’s theme parks segment was under close scrutiny given the national conversation about rising consumer costs and gas prices due to the U.S.-Iran war. Analysts had wondered whether consumers would tighten their belts and forgo vacations given the higher travel costs.

Disney did see a 1% decline in attendance at its U.S.-based parks compared with the prior year, which the company attributed to “continued softness” in international visitors, but said it was starting to move past those issues. Company executives have previously said Disney pivoted marketing and promotional efforts to attract local visitors.

Last quarter, executives indicated that results in the company’s second fiscal quarter could be affected, in part, by “international visitation headwinds,” a nod to the lower number of foreign visitors now traveling to the U.S.

Though the heightened economic uncertainty around the world could have a “potential impact” on the business, Disney Chief Executive Josh D’Amaro and Chief Financial Officer Hugh Johnston said in a shareholder letter Wednesday that the company was “encouraged by current demand.” The company expected that fiscal third-quarter domestic attendance numbers would improve, they wrote.

The company’s overall earnings were powered by its entertainment business, which posted revenue of $11.7 billion, up 10% compared with the prior year’s quarter.

That growth was driven by big gains for Disney’s streaming services — Disney+ and Hulu — which raked in nearly $5.5 billion in revenue, an increase of 13% compared with 2025, thanks to higher subscription fees from user growth and more advertising revenue. Operating income for the streaming business jumped 88% to $582 million.

Disney’s entertainment segment also had a stronger quarter at the theatrical box office, with standout performances from 20th Century Studios’ “Avatar: Fire and Ash,” the animated sequel “Zootopia 2” and Pixar’s “Hoppers.”

Overall, the company reported $25.2 billion in revenue, a 7% bump from the prior year. Income before income taxes totaled $3.4 billion, an increase of 9% compared with the same period in 2025, while operating income rose 4% to $4.6 billion. Earnings per share, excluding certain items, was $1.57, compared with $1.45 a year earlier.

Disney’s sports segment, which includes ESPN, reported revenue of $4.6 billion, a 2% increase from the same period in 2025. It brought in operating income of $652 million, a 5% slide that the company attributed to higher sports rights costs and the absence of UFC pay-per-view revenue compared with last year.

Disney also alluded to the company’s view of artificial intelligence as a “meaningful long-term opportunity,” saying it could play a role in content creation and production, monetization, workforce productivity, consumer and guest experiences and enterprise operations.

“At the same time, we are committed to implementing AI in a way that keeps human creativity at the center of everything we do and respects creators and the value of our intellectual property,” D’Amaro and Johnston said in the shareholder letter.

After noting OpenAI’s closure of the text-to-video AI tool Sora, which Disney had planned to invest in, D’Amaro and Johnston said the company will “continue to explore” commercial opportunities with OpenAI and other companies.

A fragile ceasefire may have paused the US-Israeli war on Iran, but the economic cost is crippling the daily lives of Iranians. The US is blockading Iranian ports, while the price of goods skyrockets and businesses struggle to keep employees.

As Iran stares down the economic consequences of a prolonged blockade of the Strait of Hormuz, attention is shifting north.

With Gulf shipping lanes disrupted and oil exports constrained, Tehran may seek to depend less on the Gulf and more on a patchwork of railways, Caspian ports and sanctions-era trade networks linking it to Russia.

The importance of that relationship was underscored this week when Iranian Foreign Minister Abbas Araghchi travelled to St Petersburg for talks with Russia’s President Vladimir Putin, praising Moscow’s “firm and unshaken” support as the two sides discussed the war, sanctions and the future of the Strait of Hormuz.

But could Moscow really offer a lifeline for Iran’s beleaguered, war-torn economy, and would it even want to? We spoke to experts to find out.

Increasing but modest bilateral trade

Economic relations between Iran and Russia deepened after the US withdrew from a 2015 nuclear deal with Iran and other nations in 2018 and reimposed sweeping sanctions on Tehran.

Russia’s full-scale invasion of Ukraine in 2022 served to accelerate that trend as both countries found themselves increasingly cut off from the Western financial system. They turned to sanctions-evasion networks, alternative payment systems and non-Western trade corridors to keep goods, energy and money flowing.

Current trade is dominated by agricultural products – especially wheat, barley and corn – alongside machinery, metals, timber, fertilisers and industrial inputs. Tehran has also supplied Russia with low-cost Shahed drones, which Russia updated and has been using in its war on Ukraine.

“Trade turnover reached $4.8bn last year [2024], but we believe that the potential for our mutual trade is much greater,” Russian Energy Minister Sergey Tsivilyov told an intergovernmental commission on trade and economic cooperation between Moscow and Tehran in 2025.

Bilateral trade is reported to have increased by 16 percent during that period, driven largely by Russian exports of grain, metals, machinery and industrial goods.

But experts say that despite this increase, the overall trade relationship remains relatively modest compared with Iran’s trade with China or the Gulf countries.

Trade between the two is “not substantial, because both countries are producing almost similar products and the industries are similar”, Mahdi Ghodsi, an economist at the Vienna Institute for International Economic Studies, told Al Jazeera.

Alternatives to Hormuz

The backbone of Russia-Iran trade is the International North-South Transport Corridor (INSTC), a network of shipping lanes, railways, and roads linking Russia to Iran and onward to Asia, bypassing Western-controlled maritime routes.

Goods move from southern Russian ports, across the Caspian Sea to northern Iranian ports, including Bandar Anzali, before continuing by rail or truck.

The route has become increasingly important for Russian grain, machinery and industrial exports to Iran.

This route can serve as a “viable but partial lifeline”, Naeem Aslam, chief market analyst at London-based Think Markets, told Al Jazeera, adding that Russian ports in Astrakhan, on the Volga River delta near the Caspian Sea, and Makhachkala, on the Caspian Sea, are already “primed for a surge in grain, metals, timber and refined products”.

A western branch also runs through Azerbaijan, though a key missing rail link between Rasht and Astara in northern Iran remains unfinished.

In 2023, Moscow agreed to help finance the line, with Russia’s president calling the agreement a “great event” that “will help to significantly diversify global traffic flows”.

Easier in theory than in practice

Analysts say that, although these routes may provide a temporary solution, the Strait of Hormuz offers a scale and efficiency that rail and land corridors cannot easily replicate.

Although maritime trade has been highly volatile in recent weeks, “from a historical perspective it is simply the quickest and the most cost-effective way of transporting anything”, Adam Grimshaw, an economic historian at the University of Helsinki, told Al Jazeera.

“Roughly 90 percent of Iran’s international trade is maritime trade that goes through the Gulf, which can’t be quickly or immediately replaced through land access to Iran or through air transport to circumvent the American blockade”, Nader Hashemi, an associate professor at Georgetown University, told Al Jazeera.

Ghodsi said Russia might be able to offer a “lifeline” in the short term, as it did when it exported grain during Iran’s droughts, but in the long run, it simply “cannot substitute” the vast amounts of maritime trade.

Re-routing trade routes via land “takes time”, pushing up prices for consumers and creating more food waste as perishables rot en route.

Does Moscow want to help Iran?

Most analysts say throwing an economic lifeline to Iran is not in Russia’s interests.

“They’ve got their own economic problems,” John Lough, head of foreign policy at the New Eurasian Strategies Centre, told Al Jazeera, pointing to signs of stagnation inside Russia, pressure on reserves and growing frustration over the prolonged war in Ukraine.

While Moscow could offer symbolic support or limited humanitarian assistance, “now is not a good time” to invest in Iran, he said, referring to the US-Israel war on the country.

Replacing maritime trade with overland routes would be extremely difficult, despite years of discussion about alternative corridors linking the two nations, he said.

It also won’t necessarily help Iran’s economy, which needs all the export revenue it can get, experts say.

“Much of Iran’s economy revolves around the sale of oil, and with that blocked or prevented by the American blockade, Russia really can’t help in that regard”, Hashemi said.

Others are more optimistic, however.

“Propping [up] Iran locks in higher global oil prices that buoy Russia’s war economy, cements INSTC dominance for Asian trade, and keeps a key anti-Western ally alive – no downside for Moscow in a fragmented Gulf,” Aslaam said.