IMF Lifts Indonesia’s 2025 Growth Forecast to 4.9%, Sees Global Expansion at 3.2% amid Trade War Risks

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WASHINGTON, Investortrust.id — The International Monetary Fund raises Indonesia’s 2025 and 2026 growth forecasts to 4.9 percent, reflecting resilient domestic demand and continued fiscal support, while also lifting its global growth projection to 3.2 percent as trade and financial shocks prove milder than expected.

In its October World Economic Outlook released on Tuesday, the IMF says Indonesia’s revised forecast marks an improvement from the July estimate of 4.8 percent, supported by steady investment momentum and the government’s pro-growth programs under President Prabowo Subianto’s administration.

Globally, the IMF upgrades its 2025 growth projection to 3.2 percent from 3.0 percent in July and 2.8 percent in April, citing stronger private-sector resilience, rapid import substitution, diversified supply chains, a weaker US dollar, and rising investment in artificial intelligence. The global growth outlook for 2026 remains at 3.1 percent.

“It’s not as bad as feared, but worse than expected a year ago,” IMF Chief Economist Pierre-Olivier Gourinchas says, quoted by Reuters. “Lower-than-expected tariffs and fiscal stimulus in major economies have helped sustain the recovery.”

However, Gourinchas warns that renewed tensions between the United States and China threaten to derail global growth. Former US President Donald Trump recently announced plans to impose 100 percent tariffs on Chinese goods, up from an average of 55 percent, in retaliation for Beijing’s expanded rare-earth export controls.

“Clearly, if this truly happens, it would be a very significant risk to the global economy,” he says, noting that escalating tariffs could weigh on investment and consumption worldwide.

According to the IMF’s downside scenario, a 30-point increase in US tariffs on Chinese goods and a 10-point increase on imports from Japan, the euro area, and emerging Asian economies could reduce global growth by 0.3 percentage points in 2026, with cumulative losses exceeding 0.6 points by 2028.

If compounded by higher inflation expectations, tighter monetary policy, and weakening demand for US assets, the Fund estimates global GDP could fall by 1.2 points in 2026 and 1.8 points in 2027 under its worst-case scenario.

United States and Europe Stay Resilient

The IMF maintains that the US economy remains robust, with growth projected at 2.0 percent in 2025 and 2.1 percent in 2026, both slightly higher than in the July forecast. The resilience is supported by fiscal stimulus, looser financial conditions, and strong investment in artificial intelligence.

The eurozone outlook also improves modestly to 1.2 percent in 2025 from 1.0 percent in July, aided by fiscal expansion in Germany and solid growth in Spain.