2026 Economic Growth Estimates and Regional Economic Cooperation

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The following is important information related to the development of the business universe that needs attention today based on the curation of the SUAR Team.

Economic Growth in 2026 Predicted at 4.9%-5%

The Institute for Economic and Social Research of the Faculty of Economics and Business, University of Indonesia (LPEM FEB UI) projects Indonesia's economic growth in 2026 to be in the range of 4.9%-5.0%. In a report titled Indonesia Economic Outlook 2026, LPEM assesses that the growth rate has not reflected significant structural improvements. Growth that appears stable is actually described as growth with suboptimal quality.
Previously, a number of international organizations have also released predictions of Indonesia's economic growth in 2026. According to the Organization for Economic Co-operation and Development (OECD) , Indonesia's economic growth in 2026 is estimated at 4.9%. The Asian Development Bank (ADB) considers Indonesia's economic growth projection to reach 5.0%. This ranks third after Vietnam with a projection of 6.7% for this year and 6.0% in 2026; and the Philippines with a projection of 5.6% for this year and 5.7% in 2026.

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CPO Exports Surge, Supported by Cooperation in Various Regions

Based on data from the Central Statistics Agency (BPS), the export value of CPO and its derivatives in the first 9 months of 2025 reached USD 18.14 billion, growing 32.40% compared to the same period last year which amounted to USD 13.70 billion. In terms of export volume, CPO and its derivatives in January-September 2025 reached 17.58 million tons, growing 11.62% YoY from 15.75 million tons last year. One of the supports was various international economic cooperation with various regions that boosted export performance. The growth in the export value of these commodities also helped Indonesia's trade balance surplus.

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Bilateral cooperation between Indonesia and Germany is a solution to overcome the impact of US tariffs

Evaluation and commitment to strengthen bilateral trade cooperation is the first step for Indonesia-Germany to cooperate amid economic uncertainty ahead of the implementation of reciprocal tariffs. Ralf Beste, Ambassador of the Federal Republic of Germany to Indonesia, said that since he started working in Jakarta three months ago, he has seen the enthusiasm and dynamism of Indonesia around the I-EU CEPA agreement. "This enthusiasm indicates that Indonesia is not only the largest market, but also a very fast growing market and is ready to work together with Germany to achieve the ideal of prosperity based on common economic interests," he said.

Two Tasks for Indonesia to Maximize the Benefits of I-EU CEPA

Towards the effective implementation of the Indonesia-European Union Comprehensive Economic Partnership Agreement (I-EU CEPA) on 1 January 2027, Indonesia still has two homework assignments to ensure maximum benefits from the economic agreement, namely improving regulations and optimizing infrastructure readiness. By making the most of the remaining time, strategic steps are needed to ensure that both go in line with the original objectives. Deputy Minister of Trade Dyah Roro Esti Widya Putri stated that the conclusion and signing of the I-EU CEPA after 9 years of negotiations took place at the right momentum amidst an uncertain geopolitical situation. With trade volume reaching EUR 27.3 billion and increasing by 4.5% on average every year, Indonesia is targeting potential...

Selected Videos Indonesia's Export Performance Grows Positively Throughout 2025

Disparities in Inflation Between Regions and Economic Challenges

The inflation rate in North Sumatra (Sumut) in October 2025 reached 4.97% YoY, recorded as the highest compared to other provinces. In fact, it has been three months in a row to be the province with the highest inflation. Not only in October, in August and September 2025 North Sumatra also recorded the highest inflation with figures of 4.42% and 5.32% respectively.
In contrast, Papua Province recorded the lowest annual inflation, only 0.53% in October 2025. Although not always the province with the lowest inflation, Papua is included in the group of five provinces with low inflation.

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The Central Statistics Agency (BPS) will release the Economic Growth Outcomes for the Third Quarter of 2025 and the State of the Workforce scheduled for Wednesday, November 5, 2025. This important data publication which is a routine agenda is the main reference for the government and business actors in formulating policies. The released publications can be directly accessed through the official BPS website.

The showcase exhibition of the industry's flagship program during the one-year Prabowo-Gibran administration will be held on November 5-9, 2025, at 10:00-22:00 WIB at Gandaria City Mall, Jakarta. The event showcases tangible evidence of the achievements of Indonesia's industrial sector in encouraging the nation's independence and competitiveness. The showcase will showcase various flagship programs and developments from various sectors, including manufacturing, food and beverages, textiles, medical devices, and technology, which demonstrate resilient and sustainable growth. The open showcase can be viewed in person at Gandaria City Mall.