IMF raises Indonesia’s 2026 growth forecast to 5.1%

The International Monetary Fund has raised its forecast for Indonesia’s economic growth in 2026 to 5.1%, an increase of 0.1 percentage point from its July projection. The IMF kept its 2027 forecast at 5.1%, according to its latest October report.

The revised 2026 outlook remains below the government’s target of at least 5.4% growth for the year. The fourth quarter will be important to that goal, while the IMF’s projection is also slightly lower than the World Bank’s 5.2% outlook, according to the report.

How Indonesia compares with its neighbours

The IMF expects Vietnam to remain the fastest-growing economy among the ASEAN countries listed in the report, with growth of 8.4% in 2026 and 7.5% in 2027. Malaysia is forecast to grow by 5.2% this year, before slowing to 4.6% next year.

Thailand’s economy is projected to expand by 2.1% in both years. The Philippines is forecast to grow by 3.4% in 2026, then accelerate to 5.1% in 2027. Indonesia’s 2026 projection is therefore above those for Thailand and the Philippines, but below Malaysia and Vietnam.

What the government is doing

The government has introduced a stimulus package worth Rp 31 trillion, or roughly $1.7 billion, to support household purchasing power. The planned measures include food aid and wage subsidies. The report does not specify how much additional growth the package is expected to generate.

Senior Deputy Economic Minister Dradjad Hari Wibowo said the government had already “identified the sources of economic expansion”. Asked about international forecasts, he said “only time will tell”. The government’s full-year target remains at least 5.4%, but the IMF projection does not indicate whether Indonesia will meet it.

This report draws on information from Jakarta Globe.