January 23, 2026 | 02:35 pm
TEMPO.CO, Jakarta - The International Monetary Fund (IMF) predicts that Indonesia's economic growth will remain steady at 5% in 2025 and 5.1% in 2026. This marks improvement from the IMF's previous estimate in October 2025 as outlined in the World Economic Outlook, which was 4.9% for both 2025 and 2026.
In the January 2026 Article IV Consultation report, the IMF wrote that Indonesia's economy has shown resilience amidst adverse shocks. "Growth is expected to remain steady at 5.0 percent in 2025 and 5.1 percent in 2026, despite a challenging external environment, reflecting support from fiscal and monetary policies," IMF wrote in its report, quoted on Friday, January 23, 2026.
IMF mentions that the main inflation is well anchored and projected to converge towards the midpoint of the target range. Furthermore, the current account deficit will remain well contained in 2025-2026, along with comfortable reserves.
However, IMF also underscores risks and downsides, citing escalating trade tensions, prolonged uncertainties, and global financial market volatility as the main external risks.
"On the domestic side, large policy shifts, if not implemented with sufficiently robust guardrails, could build up vulnerabilities," it wrote. Additionally, there are positive risks such as bolder structural reforms—including a faster-than-expected push in trade—as well as positive impacts from stronger growth among trading partners.
The IMF projection falls below the Indonesian government's target of 5.4% economic growth this year. This figure also significantly falls short of Finance Minister Purbaya Yudhi Sadewa's optimism for the economy to grow by 6% in 2026.
President Prabowo Subianto is confident that the Indonesian economy will grow beyond expectations, a remark he shared while addressing the World Economic Forum (WEF) in Davos, Switzerland, on Thursday, January 22, 2026.
Prabowo claims that Indonesia is now a "land of peace and stability" with economic growth that stands to be "significantly surprising to many" countries. According to Prabowo, Indonesia has seen consistent economic growth above 5% in recent years, with the annual inflation rate controlled at around 2%.
Sultan Abdurrahman contributed to the writing of this article
Read: Prabowo Confident Indonesia's Economic Growth Will 'Surprise Many'
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