Antara News·Indonesia·Wednesday, October 21, 2026 at 09:30 AM UTC

BI warns of global risks as Indonesia targets up to 5.7 pct growth

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Rizka Khaerunnisa, Yashinta Difa

Bank Indonesia projects Indonesia’s economic growth in 2026 to fall within the range of 4.9–5.7 percent,

Jakarta (ANTARA) - Bank Indonesia (BI) projects Indonesia’s economic growth for 2026 to remain robust within the range of 4.9 to 5.7 percent, backed by steady domestic consumption and positive investment performance, despite persistent global market uncertainties.

Speaking at a press conference following the BI Board of Governors Meeting on Wednesday, BI Governor Destry Damayanti highlighted that the global economy outlook remains weak and volatile.

"This situation is influenced by intensifying conflict in the Middle East, which has kept the prices of oil and various global commodities high," Destry noted.

BI projects global economic growth for 2026 to remain subdued at approximately 3 percent, with global inflation anticipated to hover around 4.6 percent.

The central bank warned that tight global monetary conditions would persist under a “higher for longer” scenario, driven by the possibility of further interest rate hikes by the United States Federal Reserve.

High US Treasury yields, fueled by shifting expectations for US monetary policy and a widening budget deficit, have also limited investor appetite for emerging-market assets, keeping the US Dollar Index strong.

To address these external pressures, Destry emphasized the need for a stronger and more coordinated response from fiscal and monetary authorities to bolster external resilience, maintain stability and support domestic economic growth.

Domestically, BI assesses that Indonesia’s economy remains resilient. Household consumption remains stable, supported by ongoing government various fiscal stimulus and improving consumer sentiment.

Investment is also growing, underpinned by government projects and increasing private-sector participation, as reflected in an expansionary manufacturing Purchasing Managers’ Index (PMI).

Meanwhile, non-oil and gas exports have improved but require further support to capitalize on rising commodity prices.

“Bank Indonesia projects Indonesia’s economic growth in 2026 to fall within the range of 4.9–5.7 percent,” Destry concluded.

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