Indonesia Projects Stronger Economic Growth in 2026

KBRN, Jakarta: Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto said that economic risks for 2026 have already been anticipated, giving confidence that Indonesia’s growth next year will be stronger than in 2025.

“Almost all growth risks for next year have been managed and absorbed this year. The potential risks have already been priced into interest rates, commodity prices, and the rupiah exchange rate,” Minister Airlangga stated during Bank Indonesia’s Annual Meeting on Friday, November 29, 2025.

He pointed to several improving economic indicators this year that underpin optimism for 2026, including rising household consumption and investment. Household spending, measured by the Mandiri Spending Index, reached 312, above the threshold of 300. Meanwhile, investment from January to September 2025 totaled IDR 1,434 trillion (USD 86.11 billion), growing 13.7 percent year-on-year.

“Going forward, with the presence of Danantara, the role of investment will be even more significant,” Minister Airlangga added.

On the monetary side, Bank Indonesia cut interest rates by 125 basis points throughout 2025, bringing the BI Rate down to 4.75 percent, which has boosted business lending. Consistent monetary and fiscal policies have also kept inflation within target.

“What we see for 2026 is upside risk,” Minister Airlangga said, referring to risks taken to create added value and enhance competitiveness. “With a baseline of 5.4 percent, we are hopeful and optimistic that Indonesia’s economy next year will perform better than this year.”

Finance Minister Purbaya Yudhi Sadewa echoed this optimism, even projecting that Indonesia’s growth could reach 6 percent in 2026. “We estimate fourth-quarter growth this year at around 5–5.7 percent, and hopefully next year we can push it toward 6 percent,” he said.

To support this target, Minister Purbaya explained that existing programs will be optimized, while the investment climate will be improved to enable greater private sector contributions.

“For the private sector, we aim to create an environment similar to the era of former President Susilo Bambang Yudhoyono. Reaching 6 percent growth is not too difficult; I remain optimistic,” Minister Purbaya concluded. (Gusti Panji/Sri Wahyuni)