Indonesia's 6% Economic Growth Target Needs More Than Investment

Indonesia's ambitious 6% economic growth target for 2027 faces a significant hurdle: over-reliance on investment alone is insufficient, according to economic observer Rahma Gafmi from Airlangga University.

While investment has performed well, reaching Rp1.931 trillion in 2025 and Rp1.010 trillion in the first half of 2026, Gafmi points out that this growth is heavily concentrated in capital-intensive sectors like downstream industries and infrastructure. This concentration risks creating an "exclusive" growth that does not benefit the broader population.

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Without equitable job absorption, high growth risks being exclusive.

Gafmi highlights that household consumption, a key driver of GDP, remains under pressure. Inflation, layoffs, and adjustments to regional transfers are squeezing the purchasing power of middle-class consumers. She likens the situation to "driving a car with one foot fully on the gas while the handbrake is still half-pulled," emphasizing the need for domestic demand recovery.

To accelerate towards the 6% target, Gafmi urges the government to improve bureaucratic efficiency, legal certainty, regional logistics, and synchronize monetary and fiscal policies. The existing investment foundation is strong, but the crucial challenge lies in ensuring these achievements translate into tangible benefits for the public, including reducing educated unemployment and easing regional fiscal pressures.

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Relying solely on investment without domestic purchasing power recovery is like driving a car with one foot fully on the gas while the handbrake is still half-pulled.