Indonesia has set a 6% economic growth target while remaining cautious about its budget deficit. According to Sina Finance, economists are questioning whether the country can achieve that goal.

Indonesia has been grappling in 2026 with disputes over fiscal spending and the risk that MSCI could downgrade it to frontier market status, raising doubts about whether it can meet next year's growth target. President Prabowo Subianto wants to lift growth to 6% in 2027 while keeping the fiscal deficit at 2.4% of GDP.

Ashok Bhandari, deputy chief economist at the Institute of International Finance, said the country is trying to do too much too quickly and that some of the timelines are overly ambitious. Gareth Leather, senior Asia economist at Capital Economics, called 6% growth a "huge leap" and said the government does not appear inclined to loosen fiscal policy in its draft budget.

Bright Institute senior economist Yanuar Rizky said the budget assumptions are "completely detached from reality." He said household purchasing power is fragile and online lending has surged, citing Financial Services Authority data showing outstanding peer-to-peer lending financing rose 25.88% year on year in June.

MSCI has extended its review of Indonesia's market assessment until November, with the decision set to determine whether the country is downgraded from emerging market to frontier market. Market concerns also include spending on Prabowo's free nutritious meal program, the departure of former finance minister Sri Mulyani, and questions over central bank independence after Thomas Djiwandono, Prabowo's nephew, became deputy governor of Bank Indonesia.

Indonesia's rupiah hit a record low against the U.S. dollar in June. Bhandari said solar investment prospects are encouraging and could have a long-term multiplier effect, while Leather urged a focus on supply-side measures, including more infrastructure spending and policies to attract foreign investment.

Bhandari said Indonesia could still attract new investment if the regulatory framework is in place, even if China's economy slows. He also said a commodity boom would likely be needed to support 6% growth next year by boosting exports, fiscal revenue and investment.

The outlook faces additional risks, including the Iran conflict. Indonesia has said it will keep subsidized fuel prices unchanged in 2026, but any supply disruption or worsening military conflict that pushes up global oil prices would add pressure to the budget.

DBS senior economist Radhika Rao said the planned fiscal consolidation requires the government to focus heavily on revenue collection and debt management.