Indonesia: Growth momentum seen extending into 2026 – Standard Chartered

FXStreet Insights Team FXStreet

Standard Chartered’s Senior Economist Aldian Taloputra notes that Indonesia’s Q4-2025 GDP rose 5.4% year-on-year, driven by domestic demand and stronger household consumption, lifting full-year 2025 growth to 5.1%. The bank keeps its 2026 GDP forecast at 5.2%, citing a stronger fiscal impulse, government priority investments and supportive monetary conditions, while warning about uneven growth on cautious private investment and softer exports.

Domestic demand and policy support key

"Indonesia’s economy expanded 5.4% y/y in Q4-2025 – the fastest since 2022 – on strong domestic demand."

"We maintain our 2026 GDP growth forecast at 5.2% on a stronger fiscal impulse and increased investment in government priority areas such as the mineral processing, energy and food sectors, and military spending."

"While loose monetary policy, contained inflation and a modest labour-market recovery should support household consumption, growth could remain uneven on cautious private investment amid perceived policy uncertainty."

"We also expect exports to ease further on softer external demand and government plans to reduce production of key minerals to address the global supply/demand imbalance."

"However, a relatively weak IDR could improve the competitiveness of Indonesia’s non-commodity exports."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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