JPMorgan Revises Indonesia's 2026 Economic Growth Forecast

JPMorgan has adjusted its forecast for Indonesia's economic growth in 2026, raising it from 4.9% to 5.2% following a stronger-than-expected GDP growth in the fourth quarter of 2025. According to Jin10, analyst Jin Tik Ngai highlighted in a report that the momentum at the beginning of 2026 is likely to slow down as the impact of fiscal spending and automotive sales incentives diminishes. Ngai anticipates that if the government adheres to a 3% fiscal deficit cap, the fiscal impulse will weaken this year. Despite the unexpected GDP growth, Ngai believes it is unlikely to deter Indonesia's central bank from further easing policies. He expects two 25 basis point rate cuts in the second quarter, provided the exchange rate remains stable.