OJK says Indonesia's economic growth remains strong

Indonesia's Financial Services Authority, known as OJK, says the country's economy continues to grow strongly even as global momentum weakens.

At its August 2026 Board of Commissioners meeting, the authority assessed financial-sector stability as maintained, with strong growth in financial intermediation. OJK Chair Friderica Widyasari Dewi made the remarks at an online news conference on Sept. 7, 2026.

Friderica said geopolitical risks in the Middle East remained high amid the prolonged conflict in Iran and the continued closure of the Strait of Hormuz. Disruptions to energy distribution routes have driven volatility in oil and commodity prices, keeping global inflation pressures elevated.

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The August meeting of the Board of Commissioners of the Financial Services Authority assessed that financial-sector stability was maintained with strong growth in financial intermediation.

She also linked inflation pressure to a prolonged El Niño, which has contributed to drought and forest fires in various regions. Global economic growth, she said, had moderated, with most countries recording slower growth in the second quarter of 2026. U.S. growth fell below expectations, while China's second-quarter gross domestic product growth slowed to 4.3% year on year, with production and domestic demand showing further weakness.

Indonesia's economy grew 5.29% year on year in the second quarter, supported by investment and government spending. Strong household consumption remained the main support for growth. August inflation stood at 3.19% year on year, while manufacturing activity remained in contraction at a Purchasing Managers' Index reading of 49.8.

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Global economic growth momentum tends to moderate, as reflected by most countries recording slower growth in the second quarter of 2026.