Indonesia’s economic outlook for 2026 is looking stronger growth than previously expected, with two major international financial institutions revising their growth forecasts upward. The International Monetary Fund (IMF) now expects the Indonesian economy to expand by 5.1% this year, while the World Bank has set its forecast even higher at 5.2%. Both revisions point to a more optimistic assessment of Indonesia’s growth prospects, although the institutions differ slightly in their estimates.
The IMF announced its updated projection in the October 2026 edition of its World Economic Outlook. The institution expects Indonesia’s economy to grow by 5.1% in 2026, up from its earlier estimate of 5% published in the April 2026 edition of the same report.
Despite raising its forecast for this year, the IMF has left its projection for 2027 unchanged at 5.1%. This means the institution expects Indonesia’s annual economic growth rate to remain at the same level across both years, with no further acceleration projected between 2026 and 2027.
Inflation, however, is expected to follow a different path. The IMF projects that Indonesia’s inflation rate will reach 3.3% in 2026, a higher estimate than the one it published in April. The rate is then expected to ease to 2.8% in 2027.
The World Bank has expressed greater confidence in Indonesia’s growth prospects. In its October 2026 edition of the East Asia and Pacific Economic Update, the institution raised its forecast for Indonesia’s economic growth to 5.2% this year.
The revision marks a substantial improvement on the World Bank’s previous estimate. In its April 2026 report, the institution projected that Indonesia’s economy would grow by 4.7% in 2026. The new forecast is 0.5 percentage points higher, reflecting a more favorable outlook than the one presented earlier in the year.
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Indonesia’s projected performance also compares favorably with the broader East Asia and Pacific region. The World Bank expects the region to record average economic growth of 4.5% in 2026, below Indonesia’s revised forecast of 5.2%. The regional estimate itself has improved since April, when the institution projected growth of 4.2%.
The World Bank’s East Asia and Pacific (EAP) region covers a diverse group of economies. According to the report, it includes Cambodia, China, Indonesia, Laos, Malaysia, Mongolia, Myanmar, Papua New Guinea, the Philippines, Thailand, Timor-Leste, Vietnam, and the Pacific island countries.
Taken together, the revised forecasts show that both the IMF and the World Bank expect Indonesia to maintain economic growth above the projected regional average in 2026. The World Bank anticipates a stronger expansion than the IMF, while the IMF expects growth to hold steady at 5.1% in 2027. At the same time, its inflation projections indicate that price pressures could increase in 2026 before easing the following year.
