Finance Minister Targets Economic Growth Of 5.8% In 2026

Finance Minister Targets Economic Growth Of 5.8% In 2026

Friday, 23 May 2025

Finance Minister Sri Mulyani Indrawati is targeting economic growth in the range of 5.2 percent to 5.8 percent in the 2026 Macroeconomic Framework and Fiscal Policy Principles (KEM PPKF).

"This growth rate is a strong foundation for growth of up to 8 percent in the next few years by consistently achieving the vision of Advanced Indonesia 2045," said Sri Mulyani at the 18th Plenary Meeting of the Indonesian House of Representatives on the Government's Submission of the 2026 Draft State Budget at the Parliament Complex, Jakarta, Tuesday (20/5).

As quoted from Antara, to achieve the growth target, the government will strive to maintain people's purchasing power, encourage economic transformation and reform, including downstreaming of natural resources, and improving the investment climate and human resources.

Furthermore, taking into account risks and uncertainties, the interest rate on 10-year SBN in 2026 is estimated to be in the range of 6.6 percent to 7.2 percent (7 percent in the 2025 target). The target is supported by an attractive spread and investor confidence in economic stability and good fiscal policy.

"Investors' buying interest in the SBN market will continue to be maintained and create stability, both in SBN and the rupiah exchange rate," said Sri Mulyani.

The rupiah exchange rate in 2026 is estimated to be between 16,500 rupiah and 16,900 rupiah per US dollar (16 thousand rupiah per US dollar in the 2025 target).

Inflation is targeted to be in the range of 2.5±1 percent, by continuing to maintain price stability both from the revenue and supply sides.

The price of Indonesian crude oil is targeted at the range of 60-80 US dollars per barrel, oil lifting 600-605 thousand barrels per day, and gas lifting 953 thousand-1,017 million barrels per day.

"The 2026 fiscal policy will continue to be designed to effectively support the acceleration of national economic growth, improve people's welfare, and reduce poverty," continued the Minister of Finance.

Global Uncertainty

Separately, Deputy for Coordination of Management and Development of State-Owned Enterprises of the Coordinating Ministry for Economic Affairs Ferry Irawan stated that the United States' (US) reciprocal tariff policy increases the risk of global economic uncertainty, including Indonesia. "Another implication that we also need to pay attention to is that tariffs will have a direct impact on world trade, several multilateral institutions such as the IMF, World Bank (project) global economic growth to slow down," he explained.

The government, he continued, is currently in the process of negotiating with the US government to find the best solution to deal with the reciprocal tariff policy. "Indonesia's offer to the US aims to realize fair and square trade cooperation," said Coordinating Minister for Economic Affairs Airlangga Hartarto.

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