Executive Summary

Key insights and market outlook

Bank Indonesia projects Indonesia's economic growth to reach 6.9-7.7% by 2031 under a super optimistic scenario, while the baseline scenario expects 5.6-6.4% growth ¹

. Achieving the higher projection is challenging due to current growth around 5% and requires sustainable acceleration of 1.5 percentage points over the next 5-6 years ². Key challenges include low productivity, high logistics costs, and limited fiscal space.

Full Analysis

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Deep Dive Analysis

Bank Indonesia's Ambitious Economic Growth Projections for 2031

Multiple Scenarios for Indonesia's Future Growth

Bank Indonesia (BI) has projected Indonesia's economic growth to reach between 6.9% and 7.7% by 2031 under a super optimistic scenario, as outlined in the Bank Indonesia Annual Meeting (PTBI) 2025 document ¹

². The projection is part of three simulated scenarios: baseline, optimistic, and super optimistic. For 2031, the baseline scenario projects growth between 5.6% and 6.4%, while the optimistic scenario forecasts between 6.1% and 6.9% ².

Challenges to Achieving High Growth

Achieving the projected 7.7% growth is considered challenging due to several structural issues. Currently, Indonesia's economic growth is around 5%, and experts project it to be only slightly above this level for 2025-2026 ²

. To reach the upper growth limit, Indonesia needs to sustainably accelerate its growth by more than 1.5 percentage points over the next five to six years.

Key challenges identified include ¹

²:

Low productivity levels
Slow improvement in industrial quality
High logistics costs
Regulatory uncertainty
Limited fiscal space

Expert Views on the Projections

M. Rizal Taufikurahman, Head of Macroeconomic and Finance at Indef, considers BI's projection of 6.9% to 7.7% to be quite realistic as it reflects a conservative approach to the significant structural challenges still present ¹

. Josua Pardede, Chief Economist at Bank Permata, views the upper limit of 6.9-7.7% as achievable only if all transformation agendas are effectively implemented ².