Indonesia Must Maintain Growth Momentum Amid Iran War, Says BI Governor

March 17, 2026 | 05:18 pm

TEMPO.CO, Jakarta - Bank Indonesia believes that Indonesia's economic growth momentum must be maintained amid the ongoing Middle East war.

“Moving forward, the impact of the deteriorating global economy and financial markets due to the Middle East war must be anticipated and addressed appropriately,” said Bank Indonesia Governor Perry Warjiyo during an online press conference following the BI Board of Governors’ Meeting in Jakarta on Tuesday, March 17, 2026.

Perry called for stronger policy coordination between the government, the central bank, and other relevant stakeholders to sustain domestic demand and support economic growth within the range of 4.9 to 5.7 percent.

The government must also maintain both household and business confidence to drive household consumption and investment.

Bank Indonesia also supports the government to resume beneficial programs that bolster growth and job creation. 

“Bank Indonesia will continue to strengthen its policy mix through monetary, macroprudential, and payment system policies that align closely with government policies to maintain stability while supporting economic growth,” Perry said.

Meanwhile, Indonesia's economic growth in the first quarter of 2026 is projected to increase and remain quite high, supported by strong domestic demand.

Household consumption is on the rise, supported by increased household demand related to national religious holidays (HKBN), in line with improved incomes in several income groups stemming from holiday bonuses (THR), government social spending, and various other government incentives.

Investment is also expected to remain strong, driven primarily by an acceleration in government investment, including the Red and White Village Cooperatives and Danantara investments.

Read: Bank Indonesia Holds Benchmark Interest Rate at 4.75%

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