Indonesia's 2026 Economic Outlook: Government Programs to Drive Growth

Accelerating Government Initiatives

Bank Central Asia (BCA) projects that Indonesia's economic growth will gain momentum in 2026, primarily driven by the acceleration of government programs. Key initiatives such as the 'Makan Bergizi Gratis' (Free Nutritious Meal) program and 'Koperasi Desa Merah Putih' (Red and White Village Cooperatives) are expected to gain traction, providing significant economic stimulus ¹

Economic Projections

BCA's economic research team forecasts that credit growth will improve in 2026 as government spending boosts demand for financing, particularly for working capital and household consumption. The bank's Head of Banking Research & Analytics, Victor George Petrus Matindas, noted that 2025 is considered a transition year with various programs just beginning implementation ¹

Key Economic Indicators for 2026

1. Rupiah Exchange Rate: Projected to be around Rp16,800 per USD, following natural depreciation of 4-5% annually due to inflation differentials and country risk.
2. Credit Growth: Expected to improve as fiscal stimulus supports financing demand.
3. Inflation: Managed through careful monetary policy transmission.
4. Economic Growth Drivers: Government spending, consumption, and investment.

Challenges and Opportunities

While the outlook is positive, BCA highlights several challenges:

• External Risks: Potential slowdown in China's economy and global trade tensions could impact Indonesia's net exports.
• Monetary Policy Transmission: Effective transmission of BI's rate cuts to credit interest rates will be crucial ¹
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  https://finansial.bisnis.com/read/20251125/90/1931300/proyeksi-pertumbuhan-kredit-2026-percepatan-program-pemerintah-jadi-penentu
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On the positive side, the government's focus on supporting MSMEs through regulatory incentives, such as the Macroprudential Inclusive Financing Ratio (RPIM) framework, is expected to boost credit growth while maintaining financial stability ¹

Conclusion

The combination of accelerated government spending, consumption stimulus, and investment recovery forms the foundation of BCA's optimism for Indonesia's 2026 economic outlook. Effective policy transmission and balancing domestic growth with global pressures will be key challenges.