Indonesia economy shows resilience amid manufacturing growth and new tax strategies

Indonesia is demonstrating signs of economic resilience as it enters the fourth quarter of 2026. Manufacturing activity has returned to an expansion zone with a Purchasing Managers’ Index of 52.4 in September, while exports grew by 6.72% year-on-year in August. The government aims to increase the manufacturing sector's contribution to GDP from the current 19% to a target range of 20% to 25%.

On the fiscal front, tax revenue reached Rp1,607.6 trillion by the end of September, representing 68.2% of the 2026 state budget target. To address a projected shortfall of approximately Rp750 trillion, the Directorate General of Taxes is implementing new strategies, including taxing digital transactions from overseas and collecting income tax from marketplace sellers. Tax refunds reached Rp198.71 trillion during the same period.

In terms of development and banking, the Islamic Development Bank (IsDB) has indicated an indicative funding of approximately US$2.56 billion for Indonesia between 2026 and 2030, focusing on infrastructure and human resources. Meanwhile, Bank Indonesia has appointed Ameriza M. Moesa as the new Head of Representative for North Sumatra to bolster regional economic stability. Additionally, Bank Mandiri reported a 22.3% year-on-year increase in net profit, reaching Rp37.5 trillion, and distributed an interim dividend of Rp6.16 trillion.