Indonesia Shifts Economic Focus to Productive Growth, Aims for 5.4-6% in 2026

Indonesia is embarking on a strategic economic transformation, moving beyond mere stability to foster productive, value-added growth and create high-quality jobs. Finance Minister Purbaya Yudhi Sadewa outlined this ambitious shift, emphasizing three core pillars: investment, industrialization, and productivity. This new direction prioritizes the development of downstream industries, bolstering the manufacturing sector, and enhancing human capital and operational efficiency. The goal is to achieve economic growth that is not only stable but also sustainable, diversified, and resilient, a vision Purbaya shared during the IMF-World Bank Spring Meeting. Indonesia's economic resilience, demonstrated by solid growth, low inflation, and well-managed fiscal indicators, is a testament to the effectiveness of its state budget as a shock absorber. The nation continues to maintain fiscal discipline, keeping the deficit below the 3 percent threshold against GDP. Purbaya expressed strong optimism for Indonesia's economic prospects, projecting growth between 5.4 and 6 percent for 2026, even amidst global uncertainties. This confidence is rooted in a robust national economic foundation, which saw a 5.11 percent growth in 2025, outpacing many other nations. Furthermore, Indonesia has sustained a remarkable trade surplus for 70 consecutive months, reaching US$1.27 billion in February 2026. This positive trajectory is fueled by strong household consumption, controlled inflation, and the continued implementation of downstreaming policies. While acknowledging global dynamics, including Middle East tensions impacting energy prices, the government remains vigilant, prioritizing fiscal buffers to mitigate shocks and ensure the stability of subsidized fuel. This proactive approach, coupled with efforts to optimize fiscal and monetary policy synergy and mobilize external investment, positions Indonesia as a bright spot in the global economy.

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We are encouraging downstream industries, strengthening the manufacturing sector, and improving human resources and efficiency. Going forward, Indonesia’s growth will not only be stable, but also more productive, sustainable, diversified, and resilient.