Indonesia is optimistic about reaching 6% economic growth in 2026, exceeding the government’s current baseline assumption of around 5.4% in the draft state budget. Finance Minister Purbaya Yudhi Sadewa stated that the stronger outlook is supported by improving economic conditions, effective policy adjustments, and closer coordination between fiscal authorities and Bank Indonesia. He noted that liquidity conditions have begun to strengthen, reflected in positive base money trends, helping to restore economic momentum after a softer performance in the first nine months of 2025.
To support higher growth, the government plans to accelerate state spending from the start of the year while maintaining fiscal discipline. Although state revenue has come in slightly below expectations, potentially widening the budget deficit beyond the 2025 outlook of 2.78% of GDP, the deficit is expected to remain within the legal cap of 3% of GDP. In parallel, the government is intensifying efforts to improve the investment climate through coordinated debottlenecking initiatives aimed at removing regulatory and administrative barriers. These measures have already attracted renewed interest from foreign investors, particularly from Singapore and other existing partner countries, strengthening confidence that investment will become an additional growth driver in 2026.
