Jakarta – The year 2026 has not truly opened a new chapter for Indonesia’s economy. Clouds of uncertainty still hang overhead, only now they feel closer and more tangible in everyday life.
Prices are gradually creeping upward, the labor market has not fully recovered, and confidence in policy direction is beginning to be tested. In a landscape like this, what is needed is not merely caution, but clarity in reading the situation and courage in taking action.
The First Semester 2026 Economist Survey released by the Institute for Economic and Social Research, Faculty of Economics and Business, University of Indonesia provides a picture that cannot be ignored.
The 85 economists involved in the study generally assessed Indonesia’s economic condition as deteriorating or at least stagnating.
This assessment is not merely a matter of perception, but a reflection of several indicators showing real pressure, particularly from inflation, which is expected to rise significantly in the near future.
The increase in inflation expectations is an important signal that people’s purchasing power may erode. In an economy still heavily dependent on domestic consumption, such pressure affects not only households but also the sustainability of businesses.
When people begin to hold back spending, businesses face declining demand, which can eventually lead to slower production and reduced labor absorption.
It is therefore unsurprising that the survey also recorded projections that the labor market and business environment will remain sluggish or even worsen.
This issue becomes even more complex when linked to policy effectiveness. Economists believe that fiscal policy, the financial sector, and the labor market still face limitations in driving a stronger recovery.
Although there has been slight improvement in perceptions regarding monetary policy, this has not been sufficient to offset broader challenges.
Concerns over inclusiveness and economic inequality have in fact grown stronger, indicating that existing growth has not been evenly felt across all layers of society.
Distribution of Opportunity
At this point, the economy can no longer be understood merely through growth figures. The economy becomes a reflection of the distribution of opportunity and justice. When inequality widens, social stability is also threatened.
This is worsened by perceptions that political stability and corruption control have weakened compared to previous periods. In the long term, these factors have enormous impacts on investor confidence and the credibility of public policy.
These domestic challenges do not stand alone. They intertwine with global dynamics that are equally complex. Geopolitical tensions in the Middle East, for example, continue to trigger global economic uncertainty, especially through disruptions to energy supplies and price fluctuations.
The impact is felt not only by major economies, but also by developing countries such as Indonesia, which still depends on global market stability. When energy prices rise, production costs increase and competitiveness weakens.
International rating agencies have reinforced these warning signals. Fitch Ratings and Moody’s both revised Indonesia’s sovereign outlook to negative.
This assessment is not merely a technical note, but a reflection of concerns regarding policy uncertainty and rising economic-political risks.
In the context of global financial markets, such outlook changes can directly affect the country’s borrowing costs and incoming investment flows.
Pressure on the Rupiah exchange rate, which has surpassed the range of IDR 17,000 per US dollar, has become another indicator that cannot be ignored.
In situations like this, markets expect credible policy responses, ranging from fiscal consolidation to prudence in monetary policy.
Delaying interest rate cuts, for example, has become one possible option to maintain exchange rate stability, although its consequences for growth must also be carefully considered.
However, amid these pressures, Indonesia has not actually lost its footing. Economic growth of 5.11 percent in 2025 shows that the country’s economic foundations remain relatively strong compared to many other nations.
Relatively controlled inflation during that period also demonstrates that macroeconomic stability can still be maintained. The challenge now is how to sustain this momentum amid increasingly rapid and uncertain changes.
Visionary Policies
In responding to current developments, Indonesia must begin establishing policy directions that are not only responsive, but also visionary. Closer coordination between fiscal and monetary policy is key to controlling inflation without sacrificing growth.
Improving the quality of government spending must become a priority, with a focus on productive investment capable of driving medium-term growth. On the other hand, improvements in the tax revenue system are also necessary so that fiscal space becomes healthier and more sustainable.
Attention to the labor market and business environment must not be neglected. The creation of quality jobs and regulatory simplification are important steps in improving competitiveness.
At the same time, programs promoting inclusiveness need to be strengthened so that economic growth is not enjoyed only by a small group, but is truly felt by society as a whole.
More broadly, strengthening political stability and combating corruption are non-negotiable foundations.
Without trust, even the best policies will struggle to achieve optimal results. In a global context filled with uncertainty, credibility becomes the most valuable asset a country can possess.
Amid all these challenges, one thing must not disappear: the belief that change is still possible. Human resource development and energy transition, for example, can become new sources of more sustainable growth.
Both not only address short-term needs, but also build a more resilient economic foundation for the future.
The economy never moves in a straight line. It always moves in cycles influenced by various factors, both controllable and beyond reach.
Yet within those cycles, policy choices still play a decisive role. With sharp analysis, courage in decision-making, and consistency in implementation, Indonesia has the opportunity not only to endure, but also to grow stronger.
The challenges ahead are not meant to be feared, but to be confronted with more mature strategies and greater commitment to shared prosperity.
This article was published by ANTARA
