World Bank Cuts Indonesia's Economic Growth Projection to 4.7 Percent

The World Bank has cut its projection for Indonesia’s economic growth in 2026 to 4.7 percent against gross domestic product (GDP). Previously, in October 2026, the World Bank had predicted Indonesia’s economy would grow by 4.8 percent against GDP.

This change in projection was outlined in the April 2026 edition of the East Asia and Pacific (EAP) Economic Update publication. “Indonesia’s economic growth is projected to slow to 4.7 percent, due to obstacles from rising oil prices and risk aversion sentiments,” as quoted from the report released by the World Bank on 8 April 2026.

This figure is also lower than Indonesia’s economic growth, which reached 5.1 percent. Meanwhile, for 2027, the World Bank predicts Indonesia’s economic growth will be higher, reaching 5.2 percent. In its notes, the World Bank states that this growth is supported by Danantara investments and monetary policy easing.

Meanwhile, the World Bank also predicts growth in the East Asia and Pacific (EAP) region will slow in 2026 due to external shocks. Regional growth is estimated to slow to 4.2 percent this year from the previous year’s recorded 5.0 percent. Energy shocks resulting from conflicts in the Middle East exacerbate the negative impacts from increasing trade barriers.

World Bank Group Research Director Aaditya Mattoo stated that the EAP region has extraordinary resilience. “However, current challenges can increase the economic burden and hinder productivity growth,” he said in an official statement.

The impact of the Middle East conflict depends on each country’s dependence on fuel imports, existing vulnerabilities, and economic policy flexibility. Prolonged and increasingly intense conflicts could further worsen economic conditions and reduce regional growth.

A sustained 50 percent increase in fuel prices could cause a 3-4 percent decline in income for people in this region. Targeted support, both for low-income and vulnerable communities as well as small and medium-sized enterprises, can help those most in need without burdening national finances.