By: Raka Maheswara
Indonesia’s economic condition is considered to remain on a safe track amid increasing global uncertainty. The government believes that national economic fundamentals remain strong enough to maintain stability and serve as a key asset for driving higher growth in 2026. This optimism is based not only on the achievements of various macroeconomic indicators, but also on the policy measures the government continues to prepare to maintain public purchasing power, strengthen the financial sector, and accelerate national development towards higher economic growth targets in the coming years.
Finance Minister Purbaya Yudhi Sadewa believes Indonesia still has ample opportunities for economic growth in 2026. He is even optimistic that the national economy will be able to approach 6 percent if global pressures, particularly geopolitical conflicts in the Middle East, begin to subside. According to Sadewa, improving international conditions will provide the government with more fiscal space to direct the budget toward productive programs that can accelerate national economic growth, rather than solely using it to mitigate the impact of external shocks.
Purbaya Yudhi Sadewa explained that the conflict in the Middle East has put downward pressure on global oil prices, leading to an increased need for energy subsidies. If oil prices stabilize, the government has the opportunity to redirect some subsidy spending to sectors that have a multiplier effect on the economy, such as infrastructure development, industrial strengthening, job creation, and improving the quality of human resources. He believes this strategy will be a crucial driver for accelerating Indonesia’s economic growth in the medium term.
Similar optimism emerged after the government observed developments in domestic economic activity. Purbaya Yudhi Sadewa sees the increase in motor vehicle sales as an indicator of improving public purchasing power. This trend is considered to reflect maintained consumer confidence amidst global economic dynamics. Based on these developments, the government estimates that economic growth in the second quarter of 2026 will remain in the positive range and has the potential to approach the first quarter’s annualized 5.61 percent.
Furthermore, Purbaya Yudhi Sadewa emphasized that the current direction of national economic policy is focused on building a stronger foundation toward President Prabowo Subianto’s target of 8 percent economic growth by 2029. All fiscal policy instruments, investment, industrialization, downstreaming, and strengthening the real sector are geared toward generating not only high but also sustainable economic growth that provides broad benefits to communities across the region.
This optimistic view was reinforced by Muhammad Qodari, Head of the Indonesian Communications Agency, who assessed that concerns about the possibility of Indonesia experiencing an economic crisis like that of 1998 are unfounded. According to Qodari, Indonesia’s current economic conditions are very different from those leading up to the crisis more than two decades ago, as various fundamental indicators point to healthy conditions and a much more resilient financial system.
Muhammad Qodari explained that Indonesia’s economic growth in the first quarter of 2026 reached 5.61 percent annually, an achievement considered one of the highest globally. Meanwhile, the inflation rate of 3.08 percent remained within a manageable range, demonstrating the government’s ability to maintain price stability amid global economic pressures. The government debt-to-GDP ratio also remained in the range of 40 to 41 percent, well below the maximum limit set by law, thus ensuring Indonesia’s fiscal space remains secure to support various development programs.
In addition to macroeconomic indicators, Muhammad Qodari also emphasized that the national banking sector is now far more resilient than it was during the 1998 crisis. A consistently strong capital adequacy ratio enables the national financial system to withstand various pressures. The presence of the Deposit Insurance Corporation (LPS) also protects public funds, strengthening public confidence in the banking industry and reducing the potential for panic in the event of economic turmoil.
The government is also considered to be responsive to various challenges arising from changing global conditions. Muhammad Qodari explained that the rise in global soybean prices, influenced by the weakening rupiah, was immediately addressed by providing a subsidy of Rp2,000 per kilogram for tofu and tempeh producers. This policy demonstrates that every emerging issue in society is immediately brought to the attention of President Prabowo Subianto and his cabinet to minimize its impact on people’s lives.
During nearly a year of government, various strategic policies have bolstered optimism regarding the direction of the national economy. The government continues to accelerate infrastructure development, expand industrial downstreaming programs, increase investment, strengthen food and energy security, maintain inflation stability, and expand various social protection programs to maintain public purchasing power. These steps provide a crucial foundation for maintaining business confidence and strengthening Indonesia’s economic resilience in the face of ongoing global uncertainty.
With a combination of sound economic fundamentals, an increasingly robust financial system, and government policies adapting to global changes, optimism for Indonesia’s economic future is well-founded. External challenges still require vigilance, but synergy between the government, the business world, and the public is expected to maintain economic stability while accelerating development transformation to achieve higher growth targets and improve public welfare.
*) Economic and Development Analyst