Asia Pacific Economic Research

Research evidence excerpt

Charnon Boonnuch (65) 6807 5086

Siddharth Jamad (65) 6807-5503

JPMorgan Chase Bank, N.A., Singapore Branch

Jin Tik Ngai (65) 6807 5556

ASEAN

2Q26 GDP growth surprised to the upside in Indonesia, but downside in the Philippines

Headline CPI inflation undershot expectations in

Indonesia, the Philippines and Thailand

Indonesia’s gross FX reserves dropped slightly in July,

and trade deficit persisted in June

President Prabowo reportedly nominated Destry

Damayanti as one of the new BI Governor candidates

Amid a week of data dumps, Indonesia was in focus for the

leadership transition at the central bank. Senior Deputy Governor Damayanti was reportedly nominated by the President

to Parliament as a BI Governor candidate.1 This signals some

degree of policy continuity, in our view, although some

uncertainty around the policy outlook may persist in the near

term.

The slight decline in gross FX reserves in July also reduced

concerns about the risk of a credit rating downgrade, after a

warning by Fitch recently. We raised our 2026 GDP growth

forecast for Indonesia this week, but lowered it for the Philippines, while raising Indonesia’s current account deficit for

2026.

Indonesia: Cautious 2H26 outlook

GDP growth moderated to 5.3%oya in 2Q26 (1Q26: 5.6%),

above expectations, supported by strong public sector spending (Figure 1). We raised our 2026 GDP growth forecast to

5.0% (consensus: 5.0%) from 4.7%, reflecting stronger 1H26

outturns. We still expect GDP growth to slow to 4.6%oya in

2H26 from 5.4% in 1H26 amid tighter fiscal and monetary

conditions.

Figure 1: Indonesia - GDP growth and its sources

Household cons.

GFCF

Stat disc.

%pt

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Asia Pacific Economic Research

JPMORGAN

07 August 2026

We also raised our current account deficit forecast to 1.7% of

GDP (Figure 2) from 1.0% (consensus: 1.2%), mainly reflecting still-elevated fuel imports. Import growth surged

34.3%oya from 22.2%, reflecting sustained energy imports

alongside strong machinery and electronics. Export growth

rebounded to 8.8%oya from -5.7%, led by commodities,

while non-commodity exports remained weak. As a result, the

goods trade balance remained in deficit, at US$0.5bn in June

from US$1.6bn in May.

…