Indonesian Finance Minister Calls World Bank Projection a ‘Major Mistake’
Indonesian Finance Minister Calls World Bank Projection a ‘Major Mistake’
Jakarta. Finance Minister Purbaya Yudhi Sadewa on Thursday criticized the World Bank for lowering its 2026 economic growth forecast for the country to 4.7%, calling the projection inaccurate and potentially harmful to market sentiment.
Purbaya said the revised forecast does not reflect the government’s data and could create negative perceptions about Indonesia’s economic outlook.
According to the minister, current indicators point to strengthening economic conditions rather than a slowdown.
He noted that Indonesia’s economy is expected to grow between 5.5% and 5.6% in the first quarter of 2026 alone, suggesting that the World Bank’s full-year projection implies a sharp downturn in subsequent quarters.
“If the first quarter is already around 5.5% or 5.6% or higher, then the World Bank is effectively assuming we will experience a deep slowdown. I think they have miscalculated,” Purbaya told reporters in Jakarta.
He attributed the lower forecast partly to assumptions of persistently high global oil prices. If oil prices were to normalize in the near term, Purbaya said, the World Bank would likely revise its projections upward.
“If oil prices return to normal levels within a month, the World Bank will certainly change its forecast. But they have already created negative sentiment toward us,” he said.
Purbaya added that the issue is not only about growth figures but also the psychological impact on markets and investor confidence. He went as far as to say the institution should apologize if it revises its outlook after oil prices stabilize.
“I will wait for their apology when oil prices return to normal and they revise their forecast,” he said.
The minister stressed that the government will continue to safeguard economic momentum by ensuring policy execution, maintaining financial system support, and preserving a favorable investment climate.
“I will optimize all engines of growth. The data already show improvement, and we will continue to maintain it,” Purbaya said.
He also suggested that the World Bank may not have fully accounted for policy measures currently being prepared by the government, adding that Indonesia still has room to sustain positive growth.
In its April 2026 East Asia and Pacific Economic Update, the World Bank lowered Indonesia’s growth forecast for 2026 to 4.7%, down from 4.8% projected in October 2025.
The revision was linked to external pressures, including higher global oil prices and increased investor caution in international financial markets.
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