Jakarta (VNA) - The Organisation for Economic Cooperation and Development (OECD) has revised down its economic growth forecast for Indonesia to 4.8% for 2026, while warning that inflation is expected to rise to 3.4% amid ongoing global energy shocks and trade uncertainties that continue to weigh on the economic outlook.
In its March 2026 interim economic outlook, the OECD said Indonesia’s growth will moderate from an estimated 5.1% in 2025, reflecting external pressures including higher energy prices and geopolitical tensions.
Despite the downgrade, the Indonesian economy is expected to remain relatively resilient, supported by domestic demand and fiscal stimulus.
The report also highlighted recent changes in the US's trade policy, noting that adjustments to effective tariff rates, including the introduction of a flat tariff structure, have lowered tariff burdens for several emerging markets, including Indonesia.
However, the organisation warned that shifting trade measures could prolong policy uncertainty and continue to weigh on global trade and investment.
Regarding inflation, the OECD projected that Indonesia’s consumer price index (CPI) will rise to 3.4% in 2026, significantly higher than the 1.9% recorded in 2025. Price pressures were said to stem mainly from rising energy costs, as Indonesia remains a net importer of oil and gas. Elevated energy prices can drive up production costs and weaken household purchasing power.
The organisation, however, saw some room for recovery, with Indonesia’s growth projected to pick up slightly to 5.0% in 2027 as inflation moderates and policy support continues./.
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