Iran–US–Israel War Worsens, Indonesia's Economy Could Still Grow 5.4%

Jakarta — The government has assured that Indonesia’s economy is becoming more resilient and able to grow consistently above 5%, despite global pressures such as the recent conflict in the Middle East between Iran and the United States and Israel. Deputy Finance Minister Juda Agung said that, based on risk simulations or stress tests conducted by the Ministry of Finance, the worsening conflict in the Middle East would not push Indonesia’s growth rate below 5%–5.4%. “Growth remains above 5%, even approaching the midpoint of 5.4%. So we ran these scenarios. Of course, in a very extreme scenario, the very worst is unimaginable now,” Juda said at the Indonesia Economic Forum 2026 in Jakarta earlier this week, quoted on Wednesday (4 March 2026). Juda Agung explained that the strengthening resilience of the domestic economy is due to macroeconomic management by the government, which has become stronger, particularly since the creation of the Danantara Investment Management Agency (BPI Danantara). Danantara, Juda said, has become the main engine driving the investment component of growth. As a result, the government can focus on driving the main growth components such as household consumption and government spending. “Danantara is now part of Indonesia’s macroeconomic management. The government is now focusing on the C and G components, consumption and government spending. And to some extent private consumption, especially for the lower-middle welfare,” he said. “As for investment or I, much of it now occurs domestically, much of it carried out by Danantara, and of course we also take into account foreign investment,” he emphasised.