Purbaya Projects 5.4 Percent Economic Growth

Indonesia's economy is anticipated to expand by 5.4 percent in 2026, a projection shared by Finance Minister Purbaya Yudhi Sadewa. This forecast aligns with dynamic macroeconomic assumptions, building on a strong start to the year, with economic growth already reaching 5.61 percent in the first quarter of 2026. This figure surpasses the 5.11 percent annual growth realized in 2025.

However, several key economic indicators present a mixed picture compared to official targets. Inflation for 2026 is targeted at 2.5 percent, but it stood at 3.08 percent as of May 2026, slightly higher than the 2.92 percent recorded for the entirety of 2025. The rupiah's exchange rate against the U.S. dollar, set at Rp 16,500 per dollar in the state budget, has averaged Rp 17,057 year-to-date as of June 3, 2026, with a mid-rate of Rp 17,863.

Furthermore, the yield on 10-year government bonds (SBN) is projected at 6.9 percent for 2026. As of May 26, 2026, the year-to-date yield was 6.48 percent. In the energy sector, the Indonesian crude oil price (ICP) is assumed at $70 per barrel for 2026, but the realization reached $91.9 per barrel by May 2026. Oil lifting is targeted at 610,000 barrels per day, with a realization of only 535,800 barrels per day by February 2026.

Minister Purbaya attributed the robust economic growth to increased household consumption, investment, and accelerated government spending. Inflation is considered manageable due to declining volatile food prices and government-regulated prices, supported by policies aimed at maintaining public purchasing power. The weakening rupiah is influenced by geopolitical factors and global monetary policy trends, while SBN yield movements reflect global dynamics. The rise in global oil prices is linked to supply chain disruptions from Middle Eastern conflicts and international policy developments.