Indonesia lowers 2026 growth forecast to 5.4–5.5 per cent
The Financial System Stability Committee cut its August forecast but said domestic demand and exports continued to support the economy.
Indonesia’s Financial System Stability Committee (KSSK) now expects the economy to expand by 5.4–5.5 per cent year-on-year in 2026, compared with its August projection of 5.6–6.0 per cent. Finance Minister Suahasil Nazara announced the revised outlook at a Jakarta press conference.
The committee said the economy remained resilient despite mounting global pressures. It projected strong third-quarter growth, with domestic demand and exports providing support.
Suahasil said fiscal stimulus continued to support household consumption. The state budget was being used to cushion economic shocks through subsidies, compensation, social protection, measures to stabilise food prices and programmes to create jobs.
Investment was expected to keep growing strongly as downstream processing projects and priority infrastructure development continued. Suahasil said faster budget disbursements and social assistance distribution were supporting public spending, while higher commodity prices and demand were helping non-oil and gas exports.
Among the indicators cited by KSSK, September 2026 car sales rose 28.1 per cent year-on-year and motorcycle sales increased 15.4 per cent. The Manufacturing Purchasing Managers’ Index climbed to 54 in October 2026 from around 52 in September, remaining in expansion.
