S&P Forecasts Indonesian Economy to Grow 5.1% in 2026, Here's Why

International rating agency S&P Global Ratings has forecast that Indonesia’s economy will grow by 5.1% in 2026, as global uncertainty continues to loom. In a report released on 13 July 2026, S&P predicted that Indonesia’s gross domestic product (GDP) will only expand by 5.1% this year, with economic performance potentially slowing in the coming quarters due to external uncertainty. “We expect Indonesia’s real GDP to grow 5.1% this year (2026), as economic performance may decelerate in subsequent quarters due to ongoing external uncertainty and higher domestic interest rates,” S&P stated in its report, quoted on Monday (13/7/2026). Over the 2026 to 2029 period, Indonesia’s average economic growth is projected to reach just 4.9%. “We also forecast Indonesia’s average economic growth for the 2026-2029 period to be 4.9% per year,” S&P continued. The government’s current policies have come under scrutiny as market sentiment has been affected by a series of policy changes. “If not managed well, these changes could have a more lasting impact on investment sentiment and economic growth,” S&P cautioned. Nevertheless, the agency noted that the government has demonstrated flexibility in order to restore investor confidence. “We believe the government has shown flexibility in policy implementation in response to negative feedback from industry,” S&P concluded.