Bloomberg Projects Indonesia's Economy to Grow 5% in 2026

According to Bloomberg Intelligence, Indonesia’s economy is projected to grow by 5% in 2026, with inflation remaining at around 2.75%. This stable economic outlook comes amidst financial challenges and rising fiscal risks. The report, released in January 2026, predicts a low recession probability of only 3% over the next 12 months, with expected growth continuing at 5% through 2025 to 2027. The impressive performance of the Indonesian stock market in 2025, with a 22% increase in the Composite Stock Index, supports these optimistic expectations, driven largely by increased participation from domestic retail investors. However, the government bond market has faced significant pressures. Foreign investment inflows into government securities dropped drastically, with net inflows decreasing to just USD 25 million from a peak of USD 4.6 billion in August 2025. Currency challenges also include the weakening of the rupiah to 16,790 per US dollar, although Bank Indonesia is aiming for stability in the range of 16,500-16,400 per dollar.