JAKARTA - Bloomberg Intelligence projects Indonesia's economic growth tends to be stable, with gross domestic product (GDP) growing 5.0 percent year on year (yoy) and inflation at 2.75 percent (yoy) in 2026.
On the other hand, the bond market has the potential to face continued pressure due to the high need for debt issuance and fiscal risks, as stated in the report titled "Indonesia in Focus: Review and Outlook for 2026".
"Overall, Indonesia's economic growth is projected to range from 5.0 percent in 2025 to 2027, with the probability of a recession in the next 12 months only about 3 percent," said Bloomberg Intelligence, as quoted in an official statement, Antara, Tuesday, January 6.
The report notes that the Composite Stock Price Index (JCI) strengthened 22 percent throughout 2025, which was the strongest annual performance since 2014.
"This increase is driven by the increasing participation of domestic retail investors who are looking for higher returns," the report said.
On the other hand, the government bond market is facing significant pressure, with foreign inflows into the State Securities (SBN) almost completely eroded, with net inflows falling to only 25 million US dollars (US) from a peak of 4.6 billion US dollars in August 2025.
"Concerns about the fiscal outlook are prompting global investors to withdraw their funds from the Indonesian bond market," Bloomberg Intelligence wrote.
In addition, pressure is also seen on the rupiah exchange rate (exchange rate) which weakened to an eight-month low at Rp16,790 per US dollar, as the budget deficit approached the 3 percent limit to GDP.
However, the report notes that Bank Indonesia (BI) still targets the rupiah to be in the range of Rp16,500, even Rp16,400 per US dollar in 2026.
"Bank Indonesia signals a cautious easing of policy in 2026, with exchange rate stability remaining the top priority," the report said.
Bloomberg Intelligence also noted that Indonesia's investment reached the target of IDR 1,905 trillion in 2025.
"This achievement shows that Indonesia's attractiveness in the eyes of investors remains intact, even though market volatility has increased," he said.
Furthermore, the creative economy sector has been recorded as having successfully attracted foreign investment worth Rp. 132 trillion, with the GDP growth of the sector surpassing the national economic growth.
The report assesses this condition as one of the pillars of Indonesia's economic outlook in the medium term.
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