Flooring Guide by Cinvex – JAKARTA — Citigroup Inc. analysts are forecasting Indonesia’s Jakarta Composite Index (IHSG) to surge by approximately 10%, potentially reaching a new record high by 2026. This optimistic projection for Indonesian stock prices is primarily fueled by a combination of robust government spending and an anticipated downtrend in interest rates.
In their research, Citi analysts Helmi Arman and Rohit Garg predict the IHSG could ascend to 9,250, a significant jump from its current level of around 8,363. “Accelerated government spending plans are expected to invigorate economic growth,” the Citi analysts stated, as quoted by Bloomberg on Tuesday, November 11, 2025.
Related: Higher Than Finance Minister’s Projection, OCBC Sekuritas Forecasts IHSG to Reach 9,100 by 2026
Adding to this positive outlook, an improvement in market liquidity and more affordable funding costs are anticipated to stimulate a strong recovery in the banking sector. This resurgence is expected to manifest through more robust credit growth and healthier profit margins for financial institutions.
The IHSG has already demonstrated considerable strength, appreciating by approximately 18% year-to-date. The index has repeatedly touched new all-time highs (ATH), recently setting a fresh record last week at 8,394.59.
Related: Stock Recommendations and IHSG Movement Today, Tuesday, November 11, 2025
Citi analysts further highlighted that a more rapid execution of government expenditure and an increase in social subsidies are poised to significantly boost household consumption. This development is predicted to particularly benefit leading consumer and retail companies such as PT Sumber Alfaria Trijaya Tbk (AMRT) and PT Mayora Indah Tbk (MYOR). Simultaneously, major banks including PT Bank Syariah Indonesia Tbk (BRIS), PT Bank Negara Indonesia Tbk (BBNI), and PT Bank Rakyat Indonesia Tbk (BBRI) are also expected to capitalize on a more favorable lower interest rate environment, the analysts added.
“Despite persistent structural challenges, the synergistic combination of enhanced liquidity, a robust fiscal multiplier effect, and resilient domestic demand is expected to forge highly supportive conditions for Indonesian equities,” penned the Citigroup analysts.
However, in a stark contrast to the rallying stock market, the Indonesian Rupiah has experienced a depreciation of approximately 3.5% against the US Dollar year-to-date, positioning it as Asia’s worst-performing currency.
This weakening of the Rupiah has occurred amidst a complex backdrop of interest rate cuts, growing concerns regarding the central bank’s independence, and investor anxieties surrounding Indonesia’s fiscal prospects.
Citigroup analysts anticipate that the Rupiah will likely remain under near-term pressure. This outlook stems from Bank Indonesia’s current prioritization of economic growth over exchange rate stability, alongside potential headwinds for the trade balance exacerbated by an incident involving Freeport-McMoRan Inc.’s mining operations.
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Summary
Citigroup analysts predict Indonesia’s Jakarta Composite Index (IHSG) will increase by approximately 10% to 9,250 by 2026. This optimistic forecast is primarily fueled by robust government spending and an anticipated downtrend in interest rates. These factors, alongside improved market liquidity and more affordable funding costs, are expected to stimulate a strong recovery in the banking sector and benefit leading consumer and retail companies.
The IHSG has already demonstrated significant strength, appreciating by about 18% year-to-date and recently setting new all-time highs. In contrast, the Indonesian Rupiah has depreciated by approximately 3.5% against the US Dollar year-to-date, making it Asia’s worst-performing currency. Citigroup analysts anticipate the Rupiah will remain under near-term pressure, influenced by interest rate cuts, central bank independence concerns, and Bank Indonesia’s prioritization of economic growth over exchange rate stability.