Indonesia's overall economic expansion is expected to have met the government's 5.2% growth goal for 2025 even after widespread destruction from floods late last year, the finance minister said on Tuesday. Growth appears to have accelerated in the fourth quarter, according to the same update.
The finance ministry also reiterated its target for 2026, keeping the forecasted growth rate at 5.4% for the economy, which is valued at $1.4 trillion. The comments were delivered by Purbaya Yudhi Sadewa at a meeting of Indonesia's financial stability board.
Bank Indonesia Governor Perry Warjiyo said the central bank will continue to assess whether there is scope to reduce interest rates to help spur economic activity. He noted that policy rates have been left unchanged in recent months to support the stability of the rupiah.
Indonesia's currency has weakened this month amid concerns about the independence of the central bank. Governor Warjiyo said Bank Indonesia would act to help keep the currency stable, including through market interventions when necessary.
"In formulating monetary policy, we will always look at inflation, exchange rates, and economic growth data," Warjiyo said.
Bank Indonesia held its benchmark 7-day reverse repurchase rate at 4.75% last week, where it has remained since September. Between September 2024 and September 2025, the central bank reduced rates by a total of 150 basis points.
Governor Warjiyo expressed an expectation that the rupiah would stabilise and trend toward strengthening over time.
The statements from the finance ministry and the central bank come as policymakers balance objectives for growth and currency stability. Officials framed recent actions and targets as consistent with efforts to maintain economic momentum while addressing exchange-rate pressures.
Further monitoring of inflation, exchange-rate movements, and growth data will guide any prospective monetary policy adjustments, the central bank said.