West Java's 2026 Economic Growth Target Set at 6 Percent, Experts Warn of Global Challenges and Investment Equity
KORANMANDALA.COM – The West Java Provincial Government is targeting economic growth in the range of 5.5 to 6 percent in 2026. This target is higher than the current national economic growth average of 5.2 percent. This optimism is based on several economic indicators at West Java, which are considered quite solid.
Mochammad Rizaldy Insan Baihaqqy, a lecturer and economics observer at the Nusantara Islamic University (Uninus), believes this target is still realistic, even though Bank Indonesia's projections for West Java predict economic growth in the range of 4.9 to 5.7 percent.
According to Rizaldy, West Java has several key assets to support relatively high economic growth. One example is West Java's economic growth in the third quarter of 2025, which exceeded the national figure, at 5.20 percent.
"Furthermore, West Java's export performance continues to show a positive trend, despite being overshadowed by global economic dynamics and uncertainty," said Rizaldy.
He added that infrastructure development and investment realization are also important supporting factors. Several strategic projects, such as Kertajati Airport, toll road construction, and improved logistics connectivity, are considered capable of strengthening economic production and distribution activities.
Rizaldy also highlighted the role of the manufacturing industry, which contributes nearly 40 percent to West Java's Gross Regional Domestic Product (GRDP) and remains a major driver of growth. Meanwhile, investment realization, both Foreign Direct Investment (PMA) and Domestic Direct Investment (PMDN), has shown better performance compared to the previous period.
However, he cautioned against several challenges that need to be anticipated. West Java's dependence on the global market makes the export sector vulnerable to a global economic slowdown. Furthermore, the economic structure, still dominated by the manufacturing sector, requires strengthening household consumption and the service sector for more balanced growth.
Regional risks such as natural disasters, as well as a tight national fiscal policy, also have the potential to suppress public purchasing power and impact the investment climate.
"To achieve growth of up to 6 percent, investment alone is not enough. What's more important is how that investment can create jobs and stimulate household consumption," explained Rizaldy.
He noted that the contribution of household consumption to West Java's GRDP remains around 55 percent. Therefore, strengthening the purchasing power of the public, MSMEs, and the service sector is key to achieving higher economic growth targets.
Acuviarta Kartabi, an economic observer from Pasundan University, expressed a similar view. He assessed that West Java's economic prospects for 2026 remain quite positive, as inflation remains relatively controlled.
According to data from the West Java Central Statistics Agency (BPS), year-on-year inflation in December 2025 was recorded at 2.63 percent, with a Consumer Price Index (CPI) of 110.15.
"If economic growth improves and inflation remains stable, future wage policies have the potential to positively impact worker welfare," said Acuviarta.
In the third quarter of 2025, West Java's economy, measured by GRDP at current prices, reached IDR 759.80 trillion, while GRDP at constant 2010 prices was IDR 461.90 trillion. On an annual basis, West Java's economy grew 5.20 percent compared to the same period the previous year.
From the production side, the corporate services sector recorded the highest growth at 16.37 percent. Meanwhile, from the expenditure side, Gross Fixed Capital Formation (GFCF) was the component with the highest growth, at 5.27 percent.
Based on annual growth sources, the manufacturing industry contributed the largest share of production, at 1.35 percent. From the expenditure side, household consumption contributed the most, contributing 2.91 percent.
Acuviarta estimates that West Java's economic performance in the fourth quarter of 2025 will be better than the previous quarter, driven by various year-end policies, including the acceleration of infrastructure projects.
However, he believes the West Java Provincial Government still has significant work to do, particularly in terms of equitable investment distribution. According to him, investment should not be concentrated solely in northern regions such as Bogor, Depok, Karawang, Bekasi, and Greater Bandung.
"The southern part of West Java also needs more attention, particularly in terms of infrastructure development," he said.
In addition to equitable investment distribution, Acuviarta assessed that policy stimulus for the business sector, particularly industry, is still suboptimal. He highlighted the lack of specific policies to protect certain industrial sectors, such as textiles and textile products (TPT).
"Going forward, regional governments need to be more serious about preparing concrete policies to maintain the sustainability of strategic industrial sectors," he concluded.
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