Overview

Global economic sentiment remains fragile as major economies adjust trade policies, tighten security frameworks, and respond to shifting geopolitical alliances. For Indonesia, these dynamics intersect with rising domestic consumption, cautious banking-sector expectations, and ongoing efforts to secure strategic partnerships abroad. Fiscal priorities are increasingly shaped by large-scale disaster recovery needs in Sumatra, which continue to strain national and regional budgets. Regulatory shifts—from financial supervision to export–receipt rules—signal the government’s intent to strengthen economic resilience and improve foreign-exchange management. Diplomatically, Indonesia is deepening ties with Russia and the Middle East while navigating tensions related to diaspora aid restrictions and international trade negotiations. Social pressures are rising as illegal lending remains widespread and public safety incidents draw scrutiny to government programs. Meanwhile, the technology sector is undergoing rapid transformation driven by global advances in AI hardware and platform strategy shifts among major firms. Regionally, extreme weather events, volcanic eruptions, and environmental investigations highlight persistent vulnerabilities that complicate development agendas. As Indonesia enters 2026, the convergence of policy reform, disaster recovery, and global economic headwinds will shape the trajectory of growth and governance.