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But the community experienced an "immediate deterioration" in their rights following a condemnation from ministers and influential Islamic organisations over a two-month period, HRW said.
President Joko Widodo's spokesman Johan Budi said protecting LGBT rights was not a priority.
For those of us who have worked so hard and risked so much to come out, it is a major step backward," a lesbian activist in eastern Indonesia told HRW.
Islamic activists have also filed a judicial review at the Constitutional Court aimed at making gay sex a crime, and the court is currently holding hearings into the case.
In its report, HRW said "what began as public condemnation quickly grew into calls for criminalisation and 'cures', laying bare the depth and breadth of officials' individual prejudices".
The spike in anti-LGBT vitriol, predominantly during January and February this year, has intensified violence against sexual minorities throughout Indonesia, the report said.
In interviews with activist groups, HRW reported gay rights organisations shut their offices and even hid staff as threats mounted against them.
In Yogyakarta an Islamist group forced the closure of a transgender Islamic boarding school, while a peaceful rally in the same Central Javan city in support of Indonesia's LGBT community was shut down."The impact of anti-LGBT rhetoric from government officials is enormous for us as individuals.
A wave of angry rhetoric directed at homosexuals earlier this year — including a call to ban them from university campuses — was the first time senior officials had publicly attacked the South-East Asian nation's gay community, Human Rights Watch (HRW) said in a report.
Indonesia's lesbian, gay, bisexual, and transgender (LGBT) citizens have long been targeted by vigilante Islamist groups.