- Unfavourable global conditions mean Indonesia’s GDP growth may have peaked in Q1 2026, yet some external support may still be expected, as indicated by FDI inflows from China.
- Flows of cheap imports and low-yield funding from China may help to stabilise Indonesia’s aggregate demand condition.
- However, further CNY debt issuance may increase mismatch risks, while the growing dominance of foreign-owned enterprises may be a drag on Indonesia’s BoP without proper guardrails in place.
