A survey of 85 economists and practitioners by LPEM FEB UI, conducted between February 24 and March 9, 2026, found that 41 respondents — nearly half — believe Indonesia’s current economic conditions have worsened compared to the previous quarter, while 32 see no change and only 12 see improvement. For three consecutive survey rounds over 18 months, the same conclusion has emerged: experts have not seen a meaningful improvement in Indonesia’s economic conditions. The pattern is not a momentary dip in confidence — it is a persistent signal of structural stress that spans purchasing power, the labor market, inflation, and the business environment simultaneously.
Key Facts & Background
- The earlier LPEM survey in March 2025 — covering 42 economists — found 55% assessed Indonesia’s economy as worse than three months prior, with 7 describing conditions as “much worse” and only 1 saying conditions had improved.
- The average response score in the latest survey stood at -0.39 on a normalized scale, indicating a lean toward deterioration or stagnation, with a high confidence score of 7.37 out of 10 — meaning respondents expressed their views with conviction, not uncertainty.
- On the labor market, 44 out of 85 respondents assessed job market conditions as having worsened in Q1 2026, compared to 30 who saw no change and just 11 who saw improvement.
- Looking ahead to the next three months, 75% of respondents expect inflation to rise further, driven primarily by global geopolitical tensions disrupting supply chains and energy markets. Only 4% expect inflation to decrease.
- On growth prospects, 42% of respondents expect Indonesia’s economic growth to remain unchanged over the next quarter, 33% expect it to deteriorate further, and only 25% see a chance for improvement.
- Annual inflation reached 4.76% in February 2026 — above Bank Indonesia’s 2.5% ± 1% target band — driven largely by rising food costs.
- Indonesia’s full-year 2025 GDP growth was recorded at 5.11% — within the government’s target range — while tax revenues grew 30.4% YoY through February 2026, figures the government cited in its formal response to the survey as evidence that economic fundamentals remain sound.
Note: Multi-source AI data analytics, acknowledging the possibility of inaccuracies.
Insights
The LPEM FEB UI economist survey for early 2026 matters less for any single result, and more because the same pessimistic findings have now appeared three times in a row over 18 months. That consistency makes it hard to dismiss as background noise.
The survey captures what official statistics often miss: how professional economists feel about the economy. Their concerns focus on shrinking purchasing power, a weaker job market, and the way inflation keeps squeezing lower‑ and middle‑income households.
The government points to 5.11% GDP growth, strong tax revenues, and a rising manufacturing PMI. Those numbers aren’t wrong, but they answer a different question. GDP growth shows the economy is producing — it doesn’t show who benefits, or whether ordinary households feel the gains. This gap between upbeat macro indicators and ground‑level pessimism is itself important. It suggests that the quality of growth, not just its speed, is becoming the real measure of economic health.
With 75% of economists expecting inflation to rise further, and more than half saying the labor market is worsening, the risk is clear: household purchasing power could erode even more, dampening private consumption — the single biggest driver of Indonesia’s GDP.
For policymakers, the survey is a warning. The current policy mix may look fiscally stable, but it hasn’t yet translated into broad welfare improvements. Relying only on headline growth figures risks leaving real vulnerabilities unaddressed.