Indonesia economic outlook: World Bank raises 2026 growth projection to 5.2%

Indonesia is focusing on industrial transformation and increased investment to bolster its economy. The World Bank has raised its 2026 economic growth projection for Indonesia to 5.2 percent, up from a previous estimate of 4.7 percent. This growth is expected to remain stable through 2027, supported by resilient domestic consumption and a lower-than-expected impact from energy price fluctuations.

To reach a long-term growth target of 8 percent by 2029, Minister of Investment and Downstreaming Rosan Perkasa Roeslani stated that Indonesia requires investments exceeding Rp13,000 trillion over the next five years. Coordinating Minister for Economic Affairs Airlangga Hartarto emphasized that the nation must move beyond simple commodity downstreaming toward full industrialization, targeting sectors such as automotive, textiles, FMCG, semiconductors, and AI.

Downstreaming efforts have already seen significant success, with nickel exports surging from US$1.3 billion in 2016 to US$34 billion in 2025. Meanwhile, Bank Indonesia reported that foreign exchange reserves stood at USD146.3 billion as of September 2026, a slight decrease from the previous month due to government debt payments and exchange rate stabilization efforts.