Jakarta. Indonesia remains optimistic despite mounting domestic and global economic pressures, as uncertainty continues to define the early months of 2026 amid prolonged geopolitical tensions in the Middle East.

Finance Minister Purbaya Yudhi Sadewa stressed that Indonesia is in a secure position, supported by resilient economic fundamentals. During a series of meetings in the United States this week, he engaged with international institutions and global investors to present Indonesia’s economic outlook and policy strategy.

In a meeting with Kristalina Georgieva in Washington D.C., Purbaya highlighted Indonesia’s fiscal strength, underpinned by a Rp 420 trillion ($24.5 billion) budget excess (SAL) buffer to cushion against global shocks. After outlining the government’s approach to balancing high economic growth with fiscal sustainability, he said the IMF responded positively.

“They showed strong enthusiasm for our economic fundamentals. They have long questioned how Indonesia can achieve faster growth while keeping the budget under control,” Purbaya said in a statement on Wednesday, April 20, 2026.

Optimism was also reflected in discussions with Standard & Poor's, which reaffirmed Indonesia’s sovereign credit rating at BBB, or investment grade, with a stable outlook. Purbaya also met global investors including Fidelity, Goldman Sachs Asset Management (GSAM), Eaton Vance, and MFS in Washington, DC, following earlier meetings in New York with HSBC Global Asset Management, Lazard AM, BlackRock, Lord Abbett, and TD Asset Management.

“Hopefully, it won’t be long before global investors enter Indonesia and push the capital market to even higher levels,” he said after the meetings.

Over the past week, the Jakarta Composite Index (JCI) has gained 4.29% as of Thursday’s close, with a 3.14% increase over the past month. However, Pilarmas Investindo Sekuritas noted that investors remain in a wait-and-see mode, awaiting clarity on further negotiations between the United States and Iran. The failure of initial talks has heightened risk perceptions, particularly given the Middle East’s role as a global energy hub and the strategic importance of the Strait of Hormuz.

Strong Fundamentals, Cautious Outlook
The Coordinating Ministry for Economic Affairs pointed to recognition from at least two international institutions as evidence of Indonesia’s economic stability. The Asian Development Bank projects Indonesia’s economy to grow steadily at 5.2% in both 2026 and 2027, up from 5.1% in 2025.

Meanwhile, FTSE Russell on April 7, 2026, maintained Indonesia’s classification as a Secondary Emerging Market and explicitly stated that it is not considering placing the country on a watch list for potential downgrade.

Economic growth is expected to remain around 5%, although the International Monetary Fund slightly revised down its 2026 GDP forecast for Indonesia from 5.1% in January to 5% in its April World Economic Outlook. This adjustment reflects global economic headwinds stemming from escalating tensions involving the United States, Israel, and Iran, which have impacted oil prices and broader global conditions.

Yusuf Rendy Manilet, a researcher at the Center of Reform on Economics (CORE) Indonesia, said the 5% growth target remains realistic under baseline conditions, noting the government’s official 2026 target of 5.4%.

“However, if the conflict persists and energy prices remain elevated, the pressure will be twofold, rising production costs domestically and weakening export demand. In such a scenario, 5% would no longer be a baseline, but rather an ambitious target,” he said.

Recalibrating Strategy
The ongoing conflict in the Middle East has disrupted multiple sectors, including global supply chains. Despite this, domestic businesses remain confident that Indonesia can strengthen its role as a global production hub, supported by investment commitments secured through President Prabowo Subianto’s economic diplomacy.

However, industry players have called on the government to establish a dedicated task force to oversee and accelerate investment realization, ensuring that large-scale commitments translate into tangible progress in downstream industries and energy resilience.

“Complicated bureaucracy, inconsistent central and regional regulations, and technical constraints often discourage investors from proceeding with groundbreaking,” said Akhmad Ma’ruf Maulana, chairman of the Indonesian Industrial Estate Association (HKI) and deputy chairman for special economic zones, industrial estates, and national strategic projects at the Indonesian Chamber of Commerce and Industry (Kadin).

Businesses are also recalibrating strategies to mitigate global volatility. The plastics industry, for example, has been significantly affected by disruptions in the Middle East, with blockades in the Strait of Hormuz delaying raw material shipments and pushing prices up by 20–30%. Nevertheless, the sector is expected to grow by around 4.5% in 2026.

Another key concern is rupiah depreciation, which affects import-reliant industries. Economist Syafruddin Karimi of Andalas University highlighted that Indonesia’s healthcare sector remains heavily dependent on imported high-tech medical equipment. The pharmaceutical industry still imports more than 90% of active pharmaceutical ingredients (API) and over 70% of supporting raw materials.

To address these challenges, companies are focusing on supplier diversification, supply chain optimization, greater use of domestic raw materials, and product innovation. Stock market data from TradingView shows the healthcare sector index (IDXHealth) has risen 43.64% over the past year, despite a year-to-date correction. Last year, the sector recorded one of the strongest performances, with gains of 43.78%.

Financially, 10 listed pharmaceutical companies posted average revenue growth of 12.56% in 2025. Kalbe Farma (KLBF) recorded an 8.26% year-on-year increase in revenue to Rp 35.32 trillion, with net profit rising 13.09% to Rp 3.66 trillion.

In healthcare distribution, Medela Potentia (MDLA) reported double-digit net profit growth of 16% in 2025 to Rp 398.1 billion, supported by revenue of Rp 14.89 trillion. The company’s subsidiary, Anugrah Argon Medica (AAM), one of Indonesia’s largest pharmaceutical distributors, generated Rp 7.4 trillion in revenue. According to President Director Juliwaty, the performance was driven by business portfolio expansion and distribution partnerships with major global and national principals.

In the hospital sector, Siloam International Hospitals (SILO) posted the highest net profit at Rp 1.16 trillion. Meanwhile, Medikaloka Hermina (HEAL) recorded a 6.2% increase in revenue, although net profit declined 19.85% to Rp 429.54 billion.