Indonesia's Economic Prospects Positive Despite Global Challenges in Q2-2026
CEO of Bank Jakarta, Agus Haryoto Widodo, assesses Indonesia’s economic prospects for Q2-2026 as showing positive signals. This assessment arises despite several significant challenges, particularly from global turbulence and ongoing inflationary pressures.
Agus Haryoto Widodo told Kontan.co.id that the domestic economic foundation remains relatively strong. This strength is supported by stable household consumption, sustained investment, and the effectiveness of government fiscal and monetary policies.
This positive condition is reflected in Indonesia’s economic growth achievement throughout 2025, which reached 5.11%. Even in Q4-2025, economic growth recorded 5.39% year-on-year (yoy).
Projections for economic growth in 2026 also remain steady. Bank Indonesia estimates growth in the range of 4.9% to 5.7%, while the assumption set in the 2026 State Budget is around 5.4%.
Nevertheless, Agus Haryoto Widodo warns of persistently high inflationary pressures. Inflation in February 2026 was recorded at 4.76% yoy, a figure above the set target.
Additionally, the rupiah exchange rate continues to face pressure from global market dynamics. This becomes one of the factors requiring special attention in maintaining economic stability.
From the fiscal side, government spending remains a primary driver of economic growth. Agus emphasises the importance of targeted and high-quality budget execution to optimise its impact.
As of the end of February 2026, state revenue realisation reached Rp 358 trillion, showing 12.8% yoy growth. Meanwhile, state spending reached Rp 493.8 trillion, with significant growth of 41.9% yoy.
He also highlights the role of placing Rp 200 trillion of government funds in Himbara banks. This step is expected to enhance liquidity and encourage credit disbursement to productive sectors.
Consumer Purchasing Power and Global Conditions
In the Jakarta region, as the business centre of Bank Jakarta, economic activity shows better resilience. This is supported by regional budget spending, a strong services sector, and dynamic urban economic circulation.
Jakarta’s 2026 Regional Budget, amounting to Rp 81.32 trillion, is seen as a main pillar of local economic activity. Regional spending and operations of regional-owned enterprises create a large liquidity cycle and transaction volume.
Although the Consumer Confidence Index (IKK) in February 2026 is at an optimistic level of 125.2 and retail sales are estimated to grow 6.9% yoy, consumer purchasing power is still in the recovery phase. Inflationary pressures, particularly on food and energy prices, pose challenges that the government must address to maintain purchasing power stability.
Agus adds that future purchasing power greatly depends on the government’s ability to control inflation and create stable employment opportunities.
In contrast to domestic conditions, global factors remain the main source of uncertainty. Geopolitical conflicts, such as those in the Middle East, trigger rises in energy prices and global inflation risks. This global uncertainty can negatively impact businesses through exchange rates, funding costs, and investment sentiment.
To address these dynamics, the strategy needed is to strengthen the domestic economy to make it more resilient to global shocks. From a political perspective, domestic conditions are deemed relatively stable, but policy certainty and good governance are crucial for maintaining business confidence.
Amid these various challenges, Bank Jakarta reaffirms its commitment to continuing business expansion. However, this expansion will be conducted with a selective and prudent approach.