Indonesia’s economy recorded solid growth of 5.0 percent during the first nine months of 2025 and is expected to sustain a similar pace through 2026 and 2027, supported by robust investment levels and strong net exports. This performance reflects the country’s continued macroeconomic stability despite a challenging global environment.
According to the World Bank’s Indonesia Economic Prospects report released in December 2025, monetary and fiscal policies have become more accommodative, with targeted stimulus measures helping to boost private credit and household consumption while keeping inflation moderate and fiscal discipline intact. However, the report notes that labor market outcomes remain a concern, as job creation has been concentrated in low value-added sectors that often fail to provide middle-class wages, contributing to a steady decline in real wages over recent years.
World Bank officials emphasize that deeper structural reforms are needed to translate economic growth into improved living standards. Strengthening skills development, enhancing competition, and improving the overall business environment—particularly through digitalization—are seen as critical to raising productivity and enabling the creation of better-paying, higher-quality jobs across the economy.
The report highlights digital infrastructure as a central pillar of Indonesia’s future growth strategy. While Indonesia remains the largest digital economy in ASEAN in 2025, gaps persist in internet quality, speed, and usage, especially in rural areas and public facilities such as schools and health clinics. Although access has expanded rapidly, uneven connectivity and lagging infrastructure quality continue to constrain productivity and competitiveness.
Expanding digital capacity is identified as both an opportunity and a necessity. Data center capacity is growing, but further progress will depend on a more predictable regulatory framework and a more supportive investment climate. The World Bank notes that Indonesia can accelerate progress by scaling up existing government programs and better aligning digital investments with national development priorities.
Overall, the report concludes that strengthening digital infrastructure—alongside improving digital skills, ensuring affordability, and safeguarding data governance—will be essential for Indonesia to unlock the full potential of its digital economy. These measures are expected to broaden access to economic opportunities, support the creation of quality jobs, and drive more inclusive and sustainable growth for Indonesians in the years ahead.
