{
    "success": true,
    "data": {
        "id": 1798670,
        "msgid": "world-bank-forecasts-indonesian-economy-will-slow-to-5-1781189415",
        "date": "2026-06-11 15:27:11",
        "title": "World Bank Forecasts Indonesian Economy Will Slow to 5%",
        "author": " ",
        "source": "GALERT",
        "tags": "",
        "topic": "Economy",
        "summary": "The World Bank has forecast that Indonesia's economic growth will decelerate to 5% in 2026, citing heightened fiscal pressures from ambitious spending programmes and surging fuel subsidy costs. The projection falls below the government's own target range and reflects investor concerns over capital outflows, a plunging rupiah, and strained public finances. The bank urged gradual subsidy reforms and a shift towards more targeted social assistance to mitigate the mounting fiscal risks.",
        "content": "<p>The World Bank stated on Thursday that Indonesia\u2019s economic growth is\nexpected to slow to 5% in 2026 due to increasing fiscal pressure from\nambitious spending programmes and rising fuel subsidy costs following\nthe Iran war. The World Bank\u2019s forecast is lower than Indonesia\u2019s growth\nprojection of 5.4% to 6%. Indonesia has been hit by large capital\noutflows this year, with the rupiah plunging to an all-time low and the\nstock market slumping more than 30% in response to investor concerns\nabout President Prabowo Subianto\u2019s major spending plans, even as state\nbudget fuel subsidies have ballooned. \u201cThe 2026 projection reflects\nstronger-than-expected first-quarter results and public spending\nconcentrated at the beginning of the year, not a better external\nenvironment or risk assessment,\u201d the World Bank assessed regarding the\nIndonesian economy. It noted that the growth rate depends on the\ngovernment\u2019s fiscal stimulus ability to drive public consumption, which\nposes risks owing to the state\u2019s limited spending room. \u201cHigher oil\nprices increase the cost of energy subsidies and compensation, whilst\nthe rupiah\u2019s depreciation raises the cost of foreign debt payments,\u201d the\nreport said. The World Bank called on the government to gradually adjust\nfuel subsidies to curb mounting fiscal pressure. Indonesia has used\nstate finances to keep fuel prices unchanged, a move aimed at bolstering\npublic support. The government raised prices for only two widely used\npetrol types by 32% earlier this week, a move interpreted by analysts as\na policy adjustment. The World Bank report warned that general subsidies\nultimately benefit wealthier households more than vulnerable groups.\nFuel prices are a politically sensitive issue in Indonesia, and price\nhikes have triggered protests across the archipelago of 280 million\npeople. The report said the oil price shock provides an opportunity to\nreform subsidy programmes and shift to more targeted assistance,\nincluding cash transfers to the poorest 40% of households and\nreallocating savings towards social protection and investment.<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/world-bank-forecasts-indonesian-economy-will-slow-to-5-1781189415",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}