Indonesia eyes recovery while ADB forecasts slower Asia‑Pacific growth in 2026

Indonesia’s Coordinating Minister for Economic Affairs Airlangga Hartarto said the economy is expected to regain strength in the second half of 2026 despite recent setbacks. He noted the Consumer Confidence Index fell to 117.8 in June from 120.9 in May but remains above the safety threshold of 100, and the Manufacturing PMI stayed in contraction at 46.9. Hartarto expressed confidence that demand will pick up after the Ramadan holiday and called for policies to boost manufacturing competitiveness.

The Asian Development Bank revised its outlook for developing economies in the Asia‑Pacific region, cutting 2026 growth to 4.9% from 5.5% in 2025. The downgrade reflects prolonged effects of the Middle‑East conflict on energy, fertilizer and commodity markets, pushing regional inflation to 4.3% and raising risks of further market tightening. The bank kept the 2027 projection at 5.1%. Growth forecasts remain unchanged for China at 4.6% in 2026, while India’s estimate fell to 6.6% amid higher energy costs. The report warns that any escalation of geopolitical tensions could further dampen the region’s economic momentum.