IMF Forecasts Economic Decline for G20 Countries, Is Indonesia Safe?

The International Monetary Fund (IMF) has assessed that the growth prospects of the world’s major economic drivers, grouped in the G20, are weakening.

In its latest report titled “G20 Report on Strong, Sustainable, Balance, and Inclusive”, the IMF stated that annual growth for the group, which accounts for around 85% of global output, will be only 3% in the medium term.

This level is far lower than the G20’s realised growth of 3.4% in 2025. The IMF believes this economic decline will continue from 2030 onwards, from 3.1% in 2026, rising to 3.2% in 2027, then falling to 2.9% in 2030 and 3% in 2031.

“Only 3 percent in 2031, approaching the lowest level since the global financial crisis,” said the IMF economist team comprising Nicolas Fernandez-Arias, Marwa Ibrahim, and Colombe Ladreit, quoted on Friday (28/8/2026).

The IMF stated that the increasingly gloomy outlook for G20 growth is due to poorly designed structural policies and regulations by member countries, as well as inadequate institutional frameworks.

“Our survey shows that around half of advanced G20 economies and three-quarters of emerging markets face constraints from excessive labour market, product market, or consumer protection regulations,” the IMF said.

In advanced G20 economies, the IMF team also highlighted inadequate policies to address demographic challenges, such as ageing populations, and housing and land-use restrictions as significant obstacles.

The picture differs for emerging G20 economies, which are more affected by underdeveloped capital market regulations, weak public investment management, and deficiencies in governance and institutions that often hamper investment and growth.

“Establishing appropriate regulations is crucial as economies seek to capture the potential productivity benefits from adopting new technologies while minimising risks,” the IMF economist team said.

Although the IMF forecasts that G20 economies as a group may continue to decline, Indonesia’s projection actually shows improvement, from 5.1% growth in 2025 to 5% in 2026, 5.1% in 2027, and 5.2% in 2030-2031.