Strengthening Foundations for 8% Growth
Finance Minister Purbaya Yudhi Sadewa stated that the national economy is beginning to show movement towards 8% growth. He believes this target can be achieved within the next two to three years, alongside government efforts to strengthen economic foundations, revitalise the private sector, and improve the investment climate.
“People may say 8% growth is too high. But for me, it is almost visible,” he said.
According to him, the Indonesian economy already has the capital to grow higher. He sees the national economy reaching around 6% growth simply by reviving private and government sector activity, without needing significant industrial reform.
This condition, Purbaya revealed, serves as initial capital to accelerate economic growth to 8%. The government is currently focused on preparing a strong economic foundation so that growth can continue to increase sustainably.
“In two or three years, you will see the 8% figure poking through,” he stated confidently.
This optimism aligns with recent economic performance. Purbaya assessed that Indonesia’s economic growth of 5.29% in the second quarter of 2026 remains solid, despite the national economy facing global pressures, particularly due to high world oil prices and a weakening external sector that has impacted export performance.
“Growth of 5.29% is quite good amid global pressures,” Purbaya said.
He is confident that economic growth will increase in the third and fourth quarters of 2026.
To drive this acceleration, the government will optimise all growth engines, including increasing liquidity in the economy and encouraging lower interest rates so that banks can channel credit with cheaper interest. This is expected to boost business activity and public consumption.
“We will maximise all engines of economic growth. Going forward, I am confident that in the third and fourth quarters of 2026, the economy will move faster, on a high round towards 6%,” he said optimistically.
Chairperson of the Indonesian Employers’ Association (Apindo), Shinta Widjaja Kamdani, revealed that businesses are still facing a number of pressures. These range from rising production costs, the weakening rupiah exchange rate, slowing export demand, to weakening domestic purchasing power, all of which are limiting the space for business expansion.
She said that real sector economic activity during the second quarter of 2026 was not yet optimal because businesses had to face pressures from both the cost and demand sides. The main challenges for businesses include the surge in energy prices due to the conflict in the Strait of Hormuz, the weakening rupiah which increases the cost of imported raw materials, and the slowdown in demand from trading partner countries.
“So, the real sector economic activity experienced by businesses throughout the second quarter of 2026 was quite heavy,” Shinta said.
According to her, the economic growth in the second quarter of 2026 is still fragile, so the momentum needs to be maintained to become stronger. This would allow the business world to expand again and move away from the current defensive industry trend.
“Thus reversing the industry trend which is more defensive or experiencing pressure against the existing conditions,” she said.