Indonesia’s economic growth to exceed target in 2026, president says

JAKARTA: Indonesia’s president said on Friday that the country’s economic growth is real and will this year surpass its target, adding that business players have acknowledged the benefits of his free meals programme in boosting consumption.

Prabowo Subianto’s speech at an economic forum came after a period of turmoil triggered by a warning from index provider MSCI about stock market transparency as well as a cut in Indonesia’s bond rating outlook by Moody’s.

At the forum, attended by international agencies, Prabowo said his flagship programmes, including free meals and the development of village cooperatives and fishing villages, will boost the economy.

Prabowo said the free meals scheme has created jobs and increased the income of farmers, adding that despite a small number of food poisoning cases, the programme has been a success after reaching more than 60 million recipients.

Indonesia Q4 GDP growth beats forecast, highest since 2022

“I met with industry leaders… they told me that free meals have improved consumption,” Prabowo said.

“We are not running a handout economy,” he added.

At the same event, Indonesia’s senior economic minister Airlangga Hartarto said the economy has the potential to grow by 5.6% this year, above the official target of 5.4%, backed by projects launched by sovereign wealth fund Danantara Indonesia and the government.

Airlangga also said that market sentiment has improved, as shown by this week’s rebound.

Finance Minister Purbaya Yudhi Sadewa told the forum that economic growth for the first quarter was expected to reach between 5.5% to 6%, backed by 809 trillion rupiah ($48 billion) in government spending, which includes the free meal plan.

Meanwhile, Danantara will also break ground on fourteen more natural resource processing projects worth $19 billion, its chief executive Rosan Roeslani said. He did not give a timeframe.

“Natural resources processing sector will make significant contributions because we want to capture all the value-added (industry) in Indonesia… of course by always prioritising good governance, transparency and accountability,” Rosan told the forum.

Last week, Danantara launched six projects in natural resources processing, valued at $7 billion.

Danantara also plans to invest 202.4 trillion rupiah in data centres, agriculture, and waste-to-energy projects this year, Rosan added.

The investment included a 21 trillion rupiah data centre development platforms with global operator, he said.