Indonesia: Growth outlook supported by policy – Standard Chartered

Standard Chartered’s Aldian Taloputra reports Indonesia’s Q3 GDP grew 5.5% year-on-year, up from 5.2% in Q2, driven by household consumption, investment and exports. Energy subsidies and social spending helped sustain consumer purchasing power despite higher Oil prices. The bank maintains its 2026 GDP forecast at 5.3%, but notes upside risks from strong year-to-date growth and resilient household spending.

Policy support underpins robust expansion

"Indonesia’s GDP grew 5.5% y/y in Q3 (vs 5.2% in Q2), beating our and consensus expectations, led by relatively steady household consumption, investment and exports."

"Broadly unchanged energy prices supported by subsidies and social spending helped sustain household consumption growth above 5.0% y/y in Q3, despite higher food and imported inflation."

"We maintain our 2026 GDP growth forecast of 5.3%, with upside risk given the strong growth rebound (5.5% YTD) and resilient household spending."

"However, we expect cautious business sentiment and a weak formal-sector recovery will likely continue to weigh on growth in the near term, especially as narrowing fiscal buffers constrain support for household purchasing power."

"That said, the government has planned around IDR 31tn in year-end stimulus, largely through food assistance and wage subsidies, which should provide some support to household consumption in Q4-2026."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)