Indonesia will see faster growth in 2026, Prabowo tells Davos

[DAVOS, Switzerland] Indonesian President Prabowo Subianto predicted that growth will accelerate this year as he touted his policy programme for South-east Asia’s biggest economy to the business elite in Davos.

Speaking to the World Economic Forum in Switzerland on Thursday (Jan 22), the head of state of the world’s fourth-most populous nation cited the International Monetary Fund’s (IMF) description of the country earlier this week as “a global bright spot.”

“Indonesia’s economy grew by more than 5 per cent every year over the last decade,” Prabowo told attendees. “I am confident that this year our growth will be higher.”

Prabowo, who took office in late 2024, has pushed an economic narrative centreed on self-sufficiency, particularly in food and energy, arguing that reducing reliance on imports is critical to Indonesia’s resilience amid global shocks. That message is paired with an ambitious growth target of 8 per cent, well above Indonesia’s recent trend, and framed state intervention as necessary to accelerate development.

Despite the emphasis on self-reliance, Prabowo has consistently portrayed Indonesia as open to foreign investment, positioning the country as politically stable, resource-rich, and eager to partner with global capital – messages he reiterated in Davos. That pitch increasingly runs through Danantara, the newly launched state investment vehicle that has taken oversight of major state-owned enterprises and is being marketed as a co-investment platform for foreign partners.

“Growth requires statecraft and capital, in particular, the efficient allocation and reallocation of capital – that is why last February, we established our sovereign wealth fund, Danantara,” he said. “I am convinced that our growth, the economy, the growth of our economy will be significantly surprising to many in the world with Danantara.”

Prabowo spoke in the same week that the IMF raised its forecast for expansion this year and next to 5.1 per cent. On Wednesday, the Washington institution issued a specific so-called Article IV assessment that offered praise for the country’s actions while noting that risks are “tilted to the downside.”

Also this week, Bank Indonesia kept its interest rate steady and said it’s focused on currency stability, with central bank chief Perry Warjiyo seeking to reassure markets about autonomy after Prabowo nominated his own nephew as BI deputy governor.

The president did not mention any of that directly in his speech, though he did insist he is fighting corruption.

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“I have been sworn in to uphold the constitution and the rule of law,” he said, going on to describe measures taken this week against illegal construction on protected land that he ordered during a Cabinet meeting via zoom from London.

Speaking on his visit there, Prabowo talked about a new strategic partnership he signed with the UK.

“We hope next year we can conclude a comprehensive Economic Partnership agreement with the United Kingdom,” he said. “This is part of our strategy to deepen productivity, reduce barriers.” BLOOMBERG