Indonesia Eyes Stronger 2026 Growth as Monetary Easing and Fiscal Liquidity Reinforce Recovery

Poin Penting

●	Indonesia is positioned for stronger 2026 growth as global rates ease and domestic liquidity rises.
●	Fed rate cut expectations and the end of Quantitative Tightening support lower funding costs. Bank Indonesia holds its rate at 4.75 percent while liquidity benchmarks continue to fall.
●	Rp 276 trillion in government funds is projected to lift Q4 GDP by 0.2 percent.
●	Transport, F&B, ICT, logistics, tourism, and business services lead sectoral resilience.

JAKARTA, Investortrust.id — Indonesia enters 2026 with rising optimism as global financial conditions ease and the government injects large-scale liquidity to accelerate domestic growth. Economist Danamon Hosianna Evalita Situmorang says expectations for lower global rates and stronger internal liquidity are reinforcing the outlook for next year.

Hosianna says financial markets are preparing for a 25 basis point rate cut by the Federal Reserve by year end and the official halt of Quantitative Tightening beginning December 1 2025. She says this shift supports the potential decline in global funding costs and strengthens policy transmission in emerging markets including Indonesia as long as inflation stays within Bank Indonesia's target range.

She notes that domestic liquidity has improved even though Bank Indonesia has held the policy rate at 4.75 percent since October. Key money market benchmarks have fallen, including INDONIA at 4.00 percent and SRBI yields around 4.85 percent by mid November. Government bond yields have also declined sharply to 4.8 percent for two year tenors and 6.2 percent for ten year notes.

Hosianna says the transmission of monetary easing to the real economy remains slow. One month deposit rates dropped only 56 basis points from 4.81 percent to 4.25 percent because banks still offer higher special rates to large depositors, which represent 27 percent of total deposits. Lending rates eased only 20 basis points from 9.20 percent to 9.00 percent, reflecting sticky funding costs.

Foreign portfolio flows have begun to improve, helping domestic equities strengthen. The yield curve has steepened as short tenor government bonds rally more strongly. The rupiah, however, remains under pressure. As of November 6 the currency weakened 3.66 percent against the dollar, with USD IDR projected to move between 16500 and 16700.

Despite these challenges Hosianna says several sectors continue to outperform, supported by strong e commerce activity and a recovery in tourism. She highlights transportation, food and beverage, ICT, business services, logistics, and hospitality as the most resilient sectors. She says Bank Indonesia's easing cycle and government incentives under the KLM scheme are expected to reduce funding costs and accelerate working capital and investment credit. Hosianna says the property sector also holds recovery potential if mortgage rates decline and inventory absorption rises.

Finance Minister Purbaya Yudhi Sadewa reinforces this positive outlook, saying the placement of Rp 276 trillion in government funds across the banking system is expected to lift national output as early as the fourth quarter. He says a rough direct calculation without multiplier effects adds around 0.2 percent to GDP in Q4. He delivered the remarks during a hearing with Commission XI of Parliament in Jakarta on Thursday November 27 2025.

Purbaya projects Indonesia's fourth quarter growth at 5.6 to 5.7 percent year on year, supported by rising business confidence. He says that when liquidity increases other economic activities will follow.

He explains that the government injected an additional Rp 76 trillion into state owned banks after money supply growth fell back to 7 percent in October from 13 percent in September. The extra placement made on November 14 was intended to stabilize financial conditions. He says he added money into the system but the October figure fell again to 7 percent and he concluded it was still not enough. He says the government continues to maintain an economy with room to keep growing.

Together the easing global environment, domestic liquidity injections, stronger capital market flows, and resilient performance in key real sectors provide a coordinated foundation for Indonesia to enter 2026 with momentum rather than uncertainty. The combined outlook from Bank Danamon and the Finance Ministry signals an economy preparing for a stronger and broader based expansion next year.