The World Bank projects that Indonesia’s economy will surpass China’s growth rate by 2026.

This outlook was revealed in the World Bank’s latest report titled East Asia and the Pacific Economic Update, October 2025 edition, which was officially published on Tuesday (October 7, 2025).

According to the report, Indonesia’s economic growth is forecast to reach 4.8% in both 2025 and 2026. In comparison, China’s economy is expected to expand by 4.8% in 2025 but will slow to only 4.2% in 2026.

The World Bank highlighted that China’s economic slowdown — as the largest economy in the East Asia and Pacific region — is mainly due to weaker export performance and reduced fiscal stimulus.

“This stems from rising public debt levels and continued structural deceleration,” the World Bank stated in its latest publication.

Meanwhile, Indonesia’s stronger growth outlook is supported by targeted fiscal stimulus programs focused on food, transportation, and energy sectors, along with expanded social assistance measures. Additionally, the government continues to promote investment growth and private sector lending.

“These policies aim to support private consumption, which is projected to contribute around 54% to overall economic growth during 2025–2027. Investment growth is also expected to gradually rise, averaging 6.2% over the same period,” the World Bank noted.

Nevertheless, Indonesia’s growth pace in 2025 and 2026 will still lag behind Vietnam, which the World Bank forecasts to expand by 6.6% in 2025 and 6.1% in 2026.

“This performance reflects Vietnam’s service sector reforms, leading to over 5% productivity growth among pioneer firms in that sector and more than 10% productivity gains in innovative downstream manufacturing companies,” the World Bank explained in the report.