OECD Predicts Indonesia's Economic Growth in 2026 at Just 4.8 Percent
The latest report from the Organisation for Economic Co-operation and Development (OECD) states that Indonesia’s economic growth throughout 2026 is predicted to be only 4.8 percent. This figure is lower than the OECD’s December 2025 release, which stated that Indonesia’s economy would grow by 5 percent this year.
The downward revision in projections comes amid the escalation of war in the Middle East. In addition to economic growth, the organisation of advanced countries worldwide also predicts that Indonesia’s inflation will rise to 3.4 percent from the previous 3.1 percent.
The report titled OECD Economic Outlook, Interim Report Testing Resilience, March 2026 edition, also highlights disruptions in the Strait of Hormuz. This situation has triggered surges in energy prices and disrupted global energy supplies as well as other important commodities.
“Economic resilience globally is now being tested by the increasingly heated conflict in the Middle East. The scale and duration of that conflict remain highly uncertain, but geopolitical risk indicators have surged significantly and there have been tangible impacts on energy markets,” the report states, quoted by Tempo on Tuesday, 31 March 2026.
According to the OECD, major disruptions in global energy and commodity markets cause price surges and increase volatility in financial markets. “If it continues, this conflict will burden global growth and drive inflation higher.”
The scale and duration of the conflict are highly uncertain, but higher and more persistent energy price increases will significantly raise business costs and boost consumer price inflation. Ultimately, this will have negative consequences for growth.
The OECD states that before the escalation of the conflict, global growth remained resilient. Private consumption and investment were the main drivers in many countries. Financial and fiscal conditions were also supportive, coupled with increased demand for artificial intelligence technology.
Not only in Indonesia, the OECD has also cut the global economic growth outlook for this year to 2.9 percent, or a slowdown from last year’s 3.3 percent. Meanwhile, G20 economies are predicted to grow by 3.0 percent from the previous 3.3 percent.