Economists Reveal Five Big Threats To The Republic Of Indonesia's Economy In 2026

JAKARTA - Paramadina University economist Wijayanto Samirin warned that 2026 has the potential to be a period of full pressure for the Indonesian economy.

He assessed that the government's target to achieve 6.3 percent economic growth as stated in the National Medium-Term Development Plan (RPJMN) was difficult to realize because field conditions showed much tougher challenges.

"Despite the RPJMN target that the economy will grow 6.3 percent in 2026, the reality of the field is very different. This phenomenon illustrates that the target to grow 8 percent in 2029 is increasingly difficult to realize," he said in his statement, quoted on Tuesday, December 9.

Wijayanto projects that economic growth in 2026 will only be in the range of 4.9 5.1 percent, with a middle figure of around 5 percent.

This figure has even the potential to be lower if the government fails to anticipate the five economic traps that arise due to the situation and policy consequences.

He said several factors would increase conditions in 2026, such as the new cabinets that are still adapting, the unfinished fiscal and macro pressures, the increasingly fierce export competition, and the weakening of the real sector due to structural issues.

"The economy has the potential to grow below the middle value if the Government does not succeed in anticipating several five 2026 economic traps, which arise due to the situation or consequences of the Government's policy," he said.

Here are five economic traps in 2026:

1. Red and White Village Cooperative (KDMP)

Wijayanto conveyed that the KDMP program was considered prone to failure because it was formed in a top-down, a concept that was not mature, and had minimal community involvement.

In addition, KDMP is considered to have the potential to compete with community businesses and have a limited economic impact.

According to him, with an allocation of IDR 3 billion per KDMP through the Himbara Bank credit guaranteed by the Village Fund, it will pose a very high risk of bad credit.

"The experience of BUMDES, only about 5 percent is successful, even though it involves the community and is built with more mature preparation. The KDMP Success rate has the potential to be lower," he said.

2. Transfer Cuts to Regions (TKD)

Wijayanto said that the proportion of TKD which continues to decline triggers the impression of recentralization and two-thirds of the province is very dependent on TKD, while most districts/cities use 80'85 percent of the APBD for routine shopping.

TKD cuts have cut to 17.7 percent in the 2026 State Budget, making many local governments threatened with fiscal pressure, even just to finance basic needs.

Space for regions to increase PAD is also limited, while the issue of increasing the UN is increasingly sensitive after the issuance of a haram fatwa from MUI.

"The truncation of TKD is estimated to make a number of regional projects disappear and trigger the cutting of honorary employees. As a result, the role of the region as a motorcycle for economic growth is decreasing," he said.

3. Potential Natural Disasters

According to Wijayanto, Indonesia is facing an increase in disaster risk due to climate change and environmental damage in the country.

The Meteorology, Climatology and Geophysics Agency (BMKG) predicts the potential for various disasters, including cyclones, in early 2026.

Meanwhile, the budget of the National Disaster Management Agency (BNPB) decreased significantly from Rp1.43 trillion in the 2025 State Budget to only Rp491 billion in the 2026 State Budget.

TKD cuts also make local governments more limited in disaster prevention and management.

"In addition to requiring a rehabilitation budget, disasters also hinder economic activity and put pressure on the growth of Gross Domestic Product (GDP)," he explained.

4. Dramatization of Corruption Eradication

Wijayanto highlighted the big difference between the method of calculating the value of corruption in developed countries and Indonesia.

According to him, developed countries calculate real losses, while Indonesia includes potential losses that do not necessarily occur.

He assessed that a number of cases showed irregularities, such as the PT Timah case with a value of alleged corruption of Rp. 300 trillion, while the Bangka Belitung PDRB was only Rp. 75 trillion.

The same thing can be seen in the case of the Pertalite oplosan which is said to have cost the state Rp968 trillion, even though the total fuel and LPG 2018-2023 subsidies are only Rp806 trillion and Pertalite's total sales are Rp1,122 trillion.

The case of PT ASDP Indonesia Ferry was also considered problematic due to differences in the valuation method.

According to him, the increase in the value of corruption has a negative domino effect. "The effect of damaging the nation's reputation, exacerminating corruption indexes, causing public apathy, entrepreneurs are afraid to do business and investors are afraid to invest. So that GDP growth is depressed downwards," he said.

5. BUMN Sickness and Irrealistic Assignment

Wijayanto stated that although Danantara as the Sovereign Wealth Fund showed a strong commitment, this institution inherited many unhealthy SOEs that required major restructuring.

As for now, 95 percent of SOE dividends only come from eight companies, especially four large banks. This shows that most of the approximately 1,000 SOEs are in a non-optimal condition.

He conveyed that assignments that were considered unrealistic, such as the construction of chicken farms, Hajj villages, and waste to energy projects, were increasingly burdening the performance of SOEs.

Wijayanto assessed that Danantara needs to be given wider space to innovate so that it can develop like the Temasek in Singapore or Khazanah in Malaysia in the next 10 years.