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Jakarta, June 13, 2026— Indonesia’s economy is holding firm despite rising global uncertainty and market volatility, with strong domestic demand helping keep growth on track. The first-quarter growth was driven by household consumption, domestic investment, and government spending. Fiscal management has remained prudent, with the deficit expected to stay within the 3 percent of GDP ceiling, while government revenues have continued to strengthen on the back of domestic economic activity. However, reforms to maintain the strength of the fiscal sector and improve productivity are key to creating more and better jobs and ensuring long-term growth.
According to the World Bank Group Indonesia Economic Prospects, Managing Risks, Unlocking Productivity, growth is projected to reach 5.0 percent in 2026, as external pressures weigh on investment and exports, before recovering to 5.2 percent in 2027–28
The report underscores the importance of maintaining fiscal resilience. Strengthening revenue mobilization, improving the quality of spending, and better targeting public support would help preserve fiscal space for priority investments and social protection. In particular, the report notes that continued efforts to enhance the targeting and efficiency of energy-related spending could help improve the effectiveness of public spending while maintaining support for vulnerable households and affected livelihood groups.
Furthermore, the report highlights the key role of continued progress in structural reforms such as improving productivity and enhancing job quality to sustain long-term growth. A critical part of this agenda is regulatory reform in trade facilitation and logistics, where streamlined procedures, lower costs, and coordinated policy can strengthen competitiveness and deepen integration into global value chains.
Lestari Boediono
World Bank Media Relations
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