Jakarta. Indonesia is targeting economic growth of 5.4% in 2026, with room to reach as high as 5.6% if key productive sectors can be accelerated, the government said on Friday.

“Economic growth in 2026 is targeted at 5.4%, with potential to reach 5.6%, with priority sectors being agriculture, manufacturing, digital and energy,” Chief Economic Affairs Minister Airlangga Hartarto said at the Indonesia Economic Outlook 2026 forum in Jakarta.

The government is banking on a series of flagship programs to act as growth accelerators, including the free nutritious meals (MBG) program, the Red-and-White Village Cooperative initiative, and the construction of 3 million homes. These initiatives are expected to boost job creation, productivity, and domestic demand.

“These programs are expected to become new sources of growth that can absorb a large workforce, accelerate productivity and serve as key drivers of non-state budget financing, including through Danantara,” Airlangga said, referring to the state investment vehicle.

Indonesia’s economy ended 2025 on a solid footing. Data from the Central Statistics Agency (BPS) showed economic growth reached 5.39% year-on-year in the fourth quarter of 2025, bringing full-year growth to 5.11%, just under the government's target of 5.2%.

Airlangga said the financial sector is playing a supportive role in sustaining momentum, noting that market conditions have stabilized after recent volatility.

“The financial window has returned to a positive and stable position, and we have seen a rebound in the capital market this week,” he said.

To deepen and strengthen the capital market, the government is pursuing reforms aimed at increasing liquidity and investor participation. These include raising minimum public share ownership, or free float, from 7.5% to 15%, improving transparency of share ownership below the 5% threshold, and increasing the investment limit for pension funds and insurance companies in equities from 10% to 20%, particularly for the bluechip LQ45 stocks.

On the external front, Airlangga said economic diplomacy remains a key pillar of Indonesia’s growth strategy. The government is moving to expand market access through a series of trade agreements, including the Indonesia–European Union Comprehensive Economic Partnership Agreement, Indonesia–Canada CEPA, the Indonesia–Eurasian Economic Union framework, and an Economic Growth Partnership with the United Kingdom as a stepping stone toward a broader trade deal.

Indonesia is also set to sign an Agreement on Reciprocal Tariffs with the United States on Feb. 19, he said.

“Through global economic diplomacy under the leadership of President Prabowo Subianto, geopolitically we are opening access to almost all major markets around the world,” Airlangga said.

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