Indonesia’s business environment in 2026 offers stability amid uncertainty: moderate GDP growth around 5%, anchored by resilient domestic demand, policy continuity, and inflation within Bank Indonesia’s target range.
Forecasts from the IMF project 5.1% growth for 2026, while the government targets 5.4%, supported by increased spending and investment. However, headwinds persist, including geopolitical tensions, trade frictions, rupiah volatility, and a policy landscape that some view as less business-friendly.
For finance leaders, opportunities arise in digital transformation and AI adoption under the Making Indonesia 4.0 roadmap, which emphasises accelerating digital infrastructure, integrating AI, and promoting ethical technology use to position Indonesia as a regional digital hub.
Challenges include fragmented logistics, regulatory complexity, and the need for agile risk frameworks in a volatile global order. In retail, the sector anticipates steady expansion, with market size projected to grow at a CAGR of around 4.8–5.65% through the late 2020s, driven by omnichannel models, digital payments, and rising middle-class consumption.
Stability demands agility
Indonesia enters 2026 with macroeconomic resilience, a baseline GDP of around 5%, and controlled inflation, bolstered by household consumption. McKinsey highlights that achieving high-income status by 2045 requires tripling the number of medium-sized and large companies to boost capital per worker and productivity, and to shift employment from microenterprises to larger, more efficient entities.
Headwinds include a subdued recovery in purchasing power, external pressures from U.S. tariffs and China’s oversupply, and cautious business sentiment. PwC’s recent CEO surveys indicate that many leaders plan diversification, with growing but uneven AI adoption for analytics and automation—though execution gaps remain, particularly in turning investments into tangible returns.
Erwantho Siregar, finance director and corporate secretary at PT Duta Intidaya Tbk. (Watsons Indonesia), draws on three decades of multinational finance experience—from regional auditing to leading digital initiatives—to guide CFOs through this landscape.
Focus on controls, not paperwork
Siregar’s early role as a regional auditor across Asia exposed him to diverse business processes and regulations. “There are different business processes and regulations across countries; some are just common practice, and regulatory requirements define some,” he reflects.
Examples include varying acceptance of personal stamps versus wet signatures or system-generated documents.
The key lesson? “Learning is to understand the controls of a process, focus on the process and intention and not so much arguing on the format of certain documentations,” Siregar notes.
In retail, this agility enables flexibility to adapt to customer behaviour while maintaining robust controls—essential amid rupiah fluctuations and regulatory shifts.
“In retail, agility is essential; it allows processes to swiftly adapt to changing customer behaviour whilst maintaining robust controls,” he explains, highlighting the complexities of omnichannel inventory sharing and varied payment options.
From spreadsheets to AI: Making data work
Siregar’s foundational skills in data-driven analysis stem from early roles in management accounting.
“As a management accountant and business partnering role, there are two processes or lessons valuable for upgrading retail digital transformation. First is data-driven analysis and modelling, and second is recognition of sales in omnichannel retail processes,” he adds.
Historically reliant on spreadsheets for credit assessments, payment trends, and pricing elasticity, these activities now leverage AI for scale.
“AI enables faster analysis, the second will enable higher productivity, and the third will enable faster agility,” Siregar observes.
He cites one practical application: “AI enable this analysis to be done each day promptly and can prepare for the next 1–2-week promotion accordingly. Without AI, this task would take resources in the workforce to process this amount of data, as it is performed using spreadsheets.”
He stresses the importance of accounting rigour to validate outputs: “Sometimes you get funny results because we haven’t defined the data properly.” Clean data and clear definitions remain critical, especially as many firms upgrade capabilities amid omnichannel growth.
Understand the business before the system
ERP implementations, including SAP in Thailand and Indonesia, provided Siregar with a “helicopter view” of data flows, processes, and change management.
“Being involved directly or even leading any IT systems development and implementation will provide a strong understanding of how data is managed and structured, business processes and reporting requirements.” Erwantho Siregar
This insight bridges IT and business teams for AI initiatives, vital as Indonesia invests in 5G and data centres under its digital roadmap.
Model the supply chain three to five years ahead
Indonesia’s fragmented logistics and infrastructure challenges—particularly in second- and third-tier cities—demand long-term planning. Siregar advocates modelling various warehousing and distribution scenarios, including centralised hubs, multiple sub-depots, and hybrids.
“The planning and forecasting of these models must be in a mid to longer timeline, such as 3-5 years, to ensure CAPEX return is adequate,” he advises. Short-term forecasting risks overusing capital or lacking agility.
In business, risk shows up by the afternoon
Experiences during the 1998 Asian financial crisis and the COVID-19 pandemic underscore the importance of rapid monitoring.
“Both crises provided me with the opportunity to learn and implement business for cost efficiencies, looking into new opportunities outside mainstream sources or revenue, and shrinking organisations,” Siregar recalls. During COVID, he led twice-daily risk assessments.
For 2026–2027 volatilities—potential supply-chain disruptions or currency fluctuations—he emphasises prudence:
“From a strategic standpoint, it’s wise to remain ready for selective investments, consider prudent spending and seek to optimise current or explore any new channels or revenue streams.” Erwantho Siregar
Daily sales tracking informs tactics: “Top line is flexible; cost is longer-term,” he concludes.
Cybersecurity is ultimately a people issue
From internal audit and early token-based access in MNCs, Siregar highlights human factors. He believes his experience in internal audit and internal control has given him a strong understanding of segregation of duties, password management, and user access conflicts.
He also credits his experience in ERP and IT application implementation with providing him with adequate technical knowledge for a Finance role and change management.
His early exposure to using a token with a randomly generated PIN and dual-level password access was the start of his familiarisation with cybersecurity aspects.
“My involvement in cybersecurity implementation is more on the soft skills, knowledge, and awareness, because in reality, it only takes one click – just one moment of human error to trigger a serious breach”, he confides. “These are all risks that involve humans.” Awareness training trumps technology alone.
Toughness, storytelling and the human side
Siregar prioritises resilience in talent: “Hiring prioritises toughness for delivery over credentials.” Finance professionals must evolve into “story tellers” and “fortune tellers,” blending rigour with strategic insight. “I don’t need you to tell me the numbers AI generates; I need your opinion,” he asserts.
For upskilling in AI-driven personalisation: gain hands-on IT experience and collaborate closely with tech teams. On stress: “Don’t fight it [stress]. When you have the chance to relax, enjoy it. Find what you really enjoy.”
In 2026, with a stable yet challenging outlook, tough, data-savvy storytellers—blending financial discipline, tech fluency, and human insight—will steer Indonesian retail towards sustained profitability and innovation.
