Jakarta (ANTARA) - Indonesia's economy is expected to perform more strongly in 2026 than this year, according to a senior economist.

During a discussion in Jakarta on Tuesday, Aviliani of the Institute for Development of Economics and Finance (Indef) projected growth of 5 to 5.2 percent year-on-year, supported by domestic consumption and investment.

She said Indonesia's large young population continues to drive consumption and plays a key role in sustaining economic momentum.

Aviliani compared this with developed economies, where aging populations tend to weaken consumption and investment, slowing growth.

She noted that developing economies generally grow between 4 and 6 percent, placing Indonesia within that range.

To maintain momentum, she stressed the need to protect household purchasing power and enable the private sector and state-owned enterprises to accelerate investment.

Investment conditions are expected to improve next year as investors move past their wait-and-see stance following the first year of the new administration, she added.

Aviliani said that strong capital inflows show Indonesia remains an attractive developing economy in the regional investment landscape.

Despite the positive outlook, Aviliani warned that economic inequality remains a persistent challenge.

She said purchasing power pressures still affect some groups, while others are largely insulated. Growth of around 5 percent, she added, must be paired with improvements in quality and distribution to ensure more equitable benefits.

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Translator: Uyu Septiyati Liman, Primayanti
Editor: Anton Santoso
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