Juridical Analysis of Stock Market Response to Government Economic Policy: The Case of Declining IHSG in Indonesia

Harly Cliford Jonas Salmon

doi:10.47268/tatohi.v5i3.2987

Juridical Analysis of Stock Market Response to Government Economic Policy: The Case of Declining IHSG in Indonesia

Harly Cliford Jonas Salmon⁽¹⁾

(1) Faculty of Law, Universitas Pattimura, Ambon, Indonesia
email

Corresponding Author

Abstract

Introduction: Acroeconomic changes in Indonesia have a significant impact on the industrial sector and capital markets. High inflation, the depreciation of the rupiah, and rising interest rates can reduce purchasing power and corporate profitability, ultimately leading to a decline in the Composite Stock Price Index (IHSG). This economic instability may prompt investors to withdraw their capital from the stock market, further worsening the IHSG condition.

Purposes of the Research: This study aims to analyse how government economic policies influence IHSG movements by examining market responses to the fiscal and monetary policies implemented by the Indonesian government.

Methods of the Research: This research adopts a normative juridical approach by analysing laws and legal norms related to economic policies. The study examines regulations affecting stock market stability and their impact on investment decisions.

Findings of the Research: The findings indicate that unclear fiscal and monetary policies negatively affect IHSG. The 5% decline in IHSG on March 18, 2025, reflects economic and political uncertainty, causing investors to be more cautious. Policies such as budget cuts for ministries and the free nutritious meal program have triggered negative market reactions. Additionally, inconsistent tax policies have further increased economic uncertainty. This study concludes that transparency and policy consistency are crucial in maintaining IHSG stability and enhancing investor confidence in Indonesia’s capital market.

Keywords

Fiscal and Monetary Policy; Jakarta Composite Index (IHSG); Investor Protection and Capital Market Regulation.

DOI

10.47268/tatohi.v5i3.2987

Published

2025-05-31

How To Cite

APA: Salmon, H.C. (2025). Juridical Analysis of Stock Market Response to Government Economic Policy: The Case of Declining IHSG in Indonesia. TATOHI: Jurnal Ilmu Hukum, 5(3), 138-144. DOI: https://doi.org/10.47268/tatohi.v5i3.2987.

IEEE: H.C. Salmon, "Juridical Analysis of Stock Market Response to Government Economic Policy: The Case of Declining IHSG in Indonesia", TATOHI J. Ilmu Huk., vol. 5, no. 3, pp. 138-144, May. 2025. Accessed on: Jul. 27, 2025. [Online]. Available DOI: https://doi.org/10.47268/tatohi.v5i3.2987

Harvard: Salmon, H.C., (2025). "Juridical Analysis of Stock Market Response to Government Economic Policy: The Case of Declining IHSG in Indonesia". TATOHI: Jurnal Ilmu Hukum, Volume 5(3), pp. 138-144. [Online]. Available DOI: https://doi.org/10.47268/tatohi.v5i3.2987 (Accessed on: 27 July 2025)

Chicago: Salmon, Harly Cliford Jonas. "Juridical Analysis of Stock Market Response to Government Economic Policy: The Case of Declining IHSG in Indonesia." TATOHI: Jurnal Ilmu Hukum 5, no. 3 (May 31, 2025): 138-144. Accessed July 27, 2025. doi:10.47268/tatohi.v5i3.2987

Vancouver: Salmon HC. Juridical Analysis of Stock Market Response to Government Economic Policy: The Case of Declining IHSG in Indonesia. TATOHI J. Ilmu Huk. [Internet]. 2025 May 31 [cited 2025 Jul 27];5(3):138-144. Available from: https://doi.org/10.47268/tatohi.v5i3.2987

MLA 8th: Salmon, Harly Cliford Jonas. "Juridical Analysis of Stock Market Response to Government Economic Policy: The Case of Declining IHSG in Indonesia." TATOHI: Jurnal Ilmu Hukum, vol. 5, no. 3, 31 May. 2025, pp. 138-144, doi:10.47268/tatohi.v5i3.2987. Accessed 27 Jul. 2025.

BibTeX:

@article{TATOHI2987,
		author = {Harly Salmon},
		title = {Juridical Analysis of Stock Market Response to Government Economic Policy: The Case of Declining IHSG in Indonesia},
		journal = {TATOHI: Jurnal Ilmu Hukum},
		volume = {5},
		number = {3},
		year = {2025},
		keywords = {Fiscal and Monetary Policy; Jakarta Composite Index (IHSG); Investor Protection and Capital Market Regulation.},
		abstract = {Introduction: Acroeconomic changes in Indonesia have a significant impact on the industrial sector and capital markets. High inflation, the depreciation of the rupiah, and rising interest rates can reduce purchasing power and corporate profitability, ultimately leading to a decline in the Composite Stock Price Index (IHSG). This economic instability may prompt investors to withdraw their capital from the stock market, further worsening the IHSG condition.Purposes of the Research: This study aims to analyse how government economic policies influence IHSG movements by examining market responses to the fiscal and monetary policies implemented by the Indonesian government.Methods of the Research: This research adopts a normative juridical approach by analysing laws and legal norms related to economic policies. The study examines regulations affecting stock market stability and their impact on investment decisions.Findings of the Research: The findings indicate that unclear fiscal and monetary policies negatively affect IHSG. The 5% decline in IHSG on March 18, 2025, reflects economic and political uncertainty, causing investors to be more cautious. Policies such as budget cuts for ministries and the free nutritious meal program have triggered negative market reactions. Additionally, inconsistent tax policies have further increased economic uncertainty. This study concludes that transparency and policy consistency are crucial in maintaining IHSG stability and enhancing investor confidence in Indonesia’s capital market.},
				issn = {2775-619X},		pages = {138--144}			doi = {10.47268/tatohi.v5i3.2987},
				url = {https://fhukum.unpatti.ac.id/jurnal/tatohi/article/view/2987}
		}

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Dublin Core		PKP Metadata Items	Metadata for this Document

1.	Title	Title of document	Juridical Analysis of Stock Market Response to Government Economic Policy: The Case of Declining IHSG in Indonesia

2.	Creator	Author's name, affiliation, country	Harly Cliford Jonas Salmon; Faculty of Law, Universitas Pattimura, Ambon; Indonesia

3.	Subject	Discipline(s)

3.	Subject	Keyword(s)	Fiscal and Monetary Policy; Jakarta Composite Index (IHSG); Investor Protection and Capital Market Regulation.

4.	Description	Abstract	Introduction: Acroeconomic changes in Indonesia have a significant impact on the industrial sector and capital markets. High inflation, the depreciation of the rupiah, and rising interest rates can reduce purchasing power and corporate profitability, ultimately leading to a decline in the Composite Stock Price Index (IHSG). This economic instability may prompt investors to withdraw their capital from the stock market, further worsening the IHSG condition.Purposes of the Research: This study aims to analyse how government economic policies influence IHSG movements by examining market responses to the fiscal and monetary policies implemented by the Indonesian government.Methods of the Research: This research adopts a normative juridical approach by analysing laws and legal norms related to economic policies. The study examines regulations affecting stock market stability and their impact on investment decisions.Findings of the Research: The findings indicate that unclear fiscal and monetary policies negatively affect IHSG. The 5% decline in IHSG on March 18, 2025, reflects economic and political uncertainty, causing investors to be more cautious. Policies such as budget cuts for ministries and the free nutritious meal program have triggered negative market reactions. Additionally, inconsistent tax policies have further increased economic uncertainty. This study concludes that transparency and policy consistency are crucial in maintaining IHSG stability and enhancing investor confidence in Indonesia’s capital market.

5.	Publisher	Organizing agency, location	Faculty of Law, Universitas Pattimura

6.	Contributor	Sponsor(s)	Universitas Pattimura

7.	Date	(YYYY-MM-DD)	2025-05-31

8.	Type	Status & genre	Peer-reviewed Article

8.	Type	Type

9.	Format	File format	PDF

10.	Identifier	Uniform Resource Identifier	https://fhukum.unpatti.ac.id/jurnal/tatohi/article/view/2987

10.	Identifier	Digital Object Identifier	10.47268/tatohi.v5i3.2987

11.	Source	Title; vol., no. (year)	TATOHI: Jurnal Ilmu Hukum; Volume 5 Issue 3, May 2025

12.	Language	English=en	en

13.	Relation	Supp. Files

14.	Coverage	Geo-spatial location, chronological period, research sample (gender, age, etc.)

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