IMF Projects Indonesian Economy at 5 Percent, Coordinating Minister for Economic Affairs Airlangga: Relatively Safe and Solid

JAKARTA - The government assesses that Indonesia's economic growth prospects are still on a positive track and various stimulus policies and programs continue to be prepared to encourage economic growth to reach the target of 5.4 percent by the end of 2026.

For information, the International Monetary Fund (IMF) projects Indonesia's economy will grow 5 percent in 2026 and increase to 5.1 percent in 2027.

Meanwhile, global economic growth is estimated at 3 percent in 2026 before rising to 3.4 percent in 2027.

Coordinating Minister for the Economy Airlangga Hartarto said that the projections of a number of international institutions showed that Indonesia's economic fundamentals were still considered strong and stable.

"From various institutions, whether it's the IMF, the World Bank, or the OECD, they estimate that our economic growth is still in the range of around 5 percent. So relatively everyone considers our economy to be relatively safe and solid," he told the media, Friday, July 10.

Based on data from the Central Statistics Agency (BPS), Indonesia's economy grew 5.61 percent in the first quarter of 2026. The Gross Domestic Product (GDP) value on the basis of prevailing prices was recorded at Rp6,187.2 trillion, while the GDP on a constant price basis was Rp3,447.7 trillion.

However, foreign trade performance has been under pressure, namely Indonesia's trade balance recorded a deficit of 1.61 billion US dollars in May 2026, which was the first deficit after six consecutive years of surplus.

The deficit was triggered by the trade balance of oil and gas (migas) which had a deficit of 3.76 billion US dollars, while the non-migas sector still recorded a surplus of 2.15 billion US dollars.

According to Airlangga, the weakening of the trade balance was mainly influenced by the surge in the price of imported fuel oil (BBM), while the export performance of a number of major commodities such as palm oil, coal, and ferro alloys was relatively stable.

"Yesterday, one month was negative because in terms of fuel imports, the price was indeed spike (escalating), the price went up. While exports of palm oil, then coal, and also ferro alloys are actually the same yesterday, so of course we will also keep it for the next few months," he said.

Airlangga said that to maintain the momentum of economic growth until the end of the year, the government has prepared various stimuli, including the provision of 0 percent import duty facilities for LPG imports, plastic raw materials, and aircraft parts to reduce production costs and increase industry competitiveness.

"Inflation is still in the range of 2.5 percent plus minus 1 percent and we are maintaining this and the government is also encouraging several incentives, including incentives for the chemicals industry, where imports of plastic raw materials will be reduced and this PMK is being made. Likewise, for petrochemicals that have difficulty in importing LPG, we also provide zero import duties for the next six months," he said.

In addition, Airlangga said the government also strengthened the supply side through various financing programs, such as the People's Business Loan (KUR) and KUR for the housing sector, to encourage real sector activities.

"In terms of banking, it is relatively safe, indeed, third-party funds in banks have also doubled and we see that credit has also started to run, has increased compared to the last quarter," he said.