Indonesia faces economic strain, political disputes, and governance challenges in early 2026.

In early 2026, Indonesia faces mounting fiscal challenges, with state revenue down 6% and economic growth projected below 5%, raising concerns over a potential balance-of-payments crisis. Weak foreign demand for government bonds and reduced dollar liquidity have increased the rupiah’s vulnerability. President Prabowo’s coalition pushes for indirect regional elections, while internal disputes persist over mining concessions within Nahdlatul Ulama and the delayed release of the 2026 State Budget Law. The government has not declared Sumatra’s floods and landslides a national disaster despite early warnings. The Attorney General’s Office has taken over a KPK sting operation case, raising concerns over interference. Meanwhile, digital violence and the need for a “right to be forgotten” are growing concerns, and independent journalism remains vital amid political pressures.