Jakarta.  The Organisation for Economic Co-operation and Development (OECD) has revised down Indonesia’s economic growth forecast for 2026 to 4.8%, while projecting inflation to accelerate to 3.4%, as global energy shocks and trade uncertainty weigh on the outlook.

In its March 2026 interim economic outlook, the OECD said Indonesia’s growth would moderate from an estimated 5.1% in 2025, reflecting external pressures including higher energy prices and geopolitical tensions.

Despite the downgrade, Indonesia’s economy is expected to remain relatively resilient, supported by domestic demand and fiscal stimulus.

“Growth is projected to remain broadly stable as recent fiscal stimulus supports private consumption,” the OECD said.

The report also highlighted recent changes in US 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 OECD warned that shifting trade measures could prolong policy uncertainty and continue to weigh on global trade and investment.

At the same time, Indonesia faces mounting inflationary pressures. Headline inflation is projected to rise to 3.4% in 2026 from 1.9% in 2025, driven largely by higher global energy prices following disruptions in the Middle East.

As a net energy importer, Indonesia is particularly exposed to rising oil and gas prices, which could push up production costs and erode household purchasing power.

Globally, the OECD expects economic growth to slow to 2.9% in 2026, as elevated energy prices and supply chain disruptions offset gains from technology investment and lower effective tariff rates.

For Indonesia, risks remain tilted to the downside, especially if energy price shocks persist or global financial conditions tighten further.

Still, the OECD sees 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.

Add as a preferred source on Google +