Bank Indonesia forecasts 4.9–5.7 per cent growth for 2026 amid global risks
The central bank expects global growth of approximately 3 per cent and inflation around 4.6 per cent, while warning of prolonged tight monetary conditions.
Bank Indonesia forecasts that Indonesia’s economy will expand by 4.9 to 5.7 per cent in 2026, with consumption and investment supporting activity despite uncertainty in global markets. Governor Destry Damayanti outlined the outlook at a press conference after the central bank’s Board of Governors meeting.
The bank said household spending remained stable, supported by government fiscal stimulus and better consumer sentiment. Public projects and greater private-sector participation were supporting investment growth, with the manufacturing Purchasing Managers’ Index indicating expansion.
Destry described the international outlook as weak and volatile, pointing to intensifying Middle East conflict that had kept oil and other commodity prices elevated. The bank forecast approximately 3 per cent global economic growth in 2026, alongside inflation of around 4.6 per cent.
The central bank warned that monetary conditions worldwide would stay tight, citing the possibility of additional US Federal Reserve rate increases. It said elevated US Treasury yields, reflecting changing monetary policy expectations and a widening budget deficit, had curbed demand for emerging-market assets and supported the US Dollar Index.
Destry called for closer coordination between fiscal and monetary authorities to strengthen resilience against external pressures, preserve stability and sustain domestic growth. The bank also said non-oil and gas exports had improved, but needed further support to benefit from higher commodity prices.
