JAKARTA: Finance Minister Purbaya Yudhi Sadewa has expressed confidence that Indonesia’s economy can grow by 6 per cent in 2026, a target that is notably more ambitious than the government’s current assumption of around 5.4 per cent outlined in the 2026 draft state budget (RAPBN).
Speaking in Jakarta on Wednesday (Dec 31), Purbaya said the stronger growth outlook was supported by improving economic conditions and closer coordination between fiscal and monetary authorities.
“Our economy will grow better than it is now. In 2026, growth should reach 6 percent. As I have said before, it is not too difficult to achieve,” he said.
Purbaya acknowledged that economic growth had slowed considerably during the first nine months of 2025.
However, he argued that recent policy adjustments had begun to restore momentum.
He also highlighted stronger coordination between the government and Bank Indonesia (BI), pointing to positive trends in base money (M0) growth as an indication of improving liquidity conditions.
To support the higher growth target, the government plans to accelerate state spending from the beginning of the year, a strategy often used to provide an early boost to economic activity.
“I will push it toward 6 percent, and the probability of achieving that target is becoming increasingly open, as our coordination with the central bank improves,” he said.
On the fiscal front, Purbaya insisted that the government faced no major obstacles in executing its spending programs.
However, he admitted that state revenue was coming in slightly below expectations, raising the likelihood of a wider budget deficit than the current 2025 outlook of 2.78 per cent of gross domestic product.
Despite this, he stressed that the deficit would remain within legal limits and would not breach the fiscal rule stipulated under Law No. 17/2002 on state finances, which caps the annual budget deficit at 3 per cent of GDP.
Purbaya said the wider deficit was partly driven by weaker-than-expected tax revenue, noting that collections fell short of the 2025 target.
“There is no denying that there has been pressure, as the economy was weak during the first nine months of 2025. Some tax collection efforts were also deliberately postponed until economic conditions improved,” he said.
Beyond fiscal and monetary measures, the government is intensifying efforts to improve the investment climate through regular debottlenecking meetings designed to address regulatory and administrative barriers to business.
These initiatives are being coordinated by a dedicated Debottlenecking Task Force.
According to Purbaya, the efforts have begun to draw attention from foreign investors, particularly from Singapore and other countries with existing investments in Indonesia.
“Many overseas investors, including those from Singapore and other countries, are showing renewed interest and have begun expanding their investments. I am confident that, if these measures are implemented consistently, the investment climate will improve significantly,” he said.
He added that sustained policy consistency could lead to drastic improvements in Indonesia’s investment environment, providing an additional engine for economic growth in 2026. - The Jakarta Post/ANN
