World Bank Cuts Indonesia's Economic Growth Projection to 4.7 Percent in 2026

JAKARTA - The World Bank has lowered its projection for Indonesia’s economic growth to 4.7 percent in 2026. This figure is lower than the October 2025 projection of 4.8 percent. The revision is included in the April 2026 edition of the East Asia and Pacific Economic Update report. “Indonesia’s growth is projected to slow to 4.7 percent, due to headwinds from higher oil prices and risk aversion sentiment,” the report states, as quoted on Thursday (9/4/2026). Global financial market risk-off sentiment is prompting many countries to strengthen buffers against energy shocks. The impact of rising energy costs is assessed to be cushioned by commodity export revenues. Indonesia is among the countries benefiting from this factor. Commodity export revenues help cover the increase in energy costs due to higher oil prices. Malaysia is also expected to reap similar benefits. Commodity export receipts are deemed capable of offsetting fuel cost pressures. This situation means that pressures on the domestic economy do not fully burden growth. The East Asia and Pacific region is projected to slow as well. Regional growth is expected to fall to 4.2 percent in 2026 from 5 percent in 2025. The slowdown is triggered by energy shocks from conflicts in the Middle East. Trade barriers, global policy uncertainty, and domestic challenges further exacerbate the situation. China is forecast to record 4.2 percent growth in 2026. This is down from 5 percent in 2025. The slowdown occurs amid weak domestic demand, property sector issues, and global pressures on exports. Other countries in the region are expected to grow by 4.1 percent in 2026. Growth is projected to recover to 5 percent in 2027 as geopolitical tensions subside.