International credit rating agency Fitch Ratings expects Indonesia’s economy to grow by around 4.9% in both 2027 and 2028, reflecting a modest improvement in its medium-term outlook.
The forecast is slightly higher than Fitch’s previous estimate of 4.7%, according to a research report published on October 21, 2026, titled “Indonesia’s Policy Uncertainty, External Headwinds Cloud Growth Outlook.”
“The gap reflects our baseline assumption that structural reforms will have only a moderate impact on total factor productivity and capital deepening within Indonesia’s potential GDP framework,” wrote Alex Muscatelli, an analyst at Fitch Ratings, in the report.
According to Muscatelli, Fitch’s base-case scenario assumes that the Indonesian government will face significant challenges in achieving its ambitious medium-term growth targets while maintaining macroeconomic and financial stability.
“Unless there are further significant structural reforms and the creation of high-quality jobs,” he added.
Inflation Expected to Ease, Rupiah Seen Strengthening
Fitch expects inflation to remain broadly stable for the rest of 2026, staying within the government’s target range before easing further in 2027 and 2028.
The rating agency also forecasts a moderate appreciation of the rupiah over the next two years.
“We expect stable growth next year as energy price shocks continue to fade,” Muscatelli said.
According to Fitch, Indonesia’s economy will continue to be supported by private-sector investment, particularly through the expansion of downstream commodity industries and supply chains.
Household consumption, which remains one of the country’s key growth drivers, is also expected to stay resilient in the coming years.
Sources: FitchRatings, Bloomberg
