The Indonesian government is deploying a new set of strategies to\ndrive economic growth in the second half of the year, following a strong\nperformance in the first semester. The Central Statistics Agency (BPS)\nrecorded that the economy grew by 5.29% year-on-year in the second\nquarter of 2026, bringing cumulative growth for the first half to 5.45%,\nthe highest first-semester figure in five years. The economy has now\ngrown above 5% for five consecutive quarters.<\/p>\n
Coordinating Minister for Economic Affairs Airlangga Hartarto stated\nthat this performance demonstrates domestic resilience amid global\npressures, including geopolitical conflicts and a world economic\nslowdown. The International Monetary Fund (IMF) projects global growth\nof only 3% this year. \u201cAmidst significant global pressures, the\nIndonesian economy continues to grow strongly and consistently above 5%.\nThis shows our domestic economic foundations are solid and the\nGovernment\u2019s policies are effective,\u201d Airlangga said at a press\nconference in Jakarta on Wednesday.<\/p>\n
Regionally, all areas recorded positive growth. Bali and Nusa\nTenggara led with 6.10% growth, supported by a tourism recovery. Java\nremained the main engine of the national economy, growing 5.65% and\ncontributing 56.47% to gross domestic product (GDP). By business field,\nthe processing industry grew 4.52%, driven by the food and beverage and\nbase metals and electronics industries, which expanded by 8.04%. The\naccommodation and food service sector accelerated sharply, growing\n10.60% alongside the expansion of the Free Nutritious Meals (MBG)\nprogramme and rising hotel occupancy. The construction sector also grew\nstrongly at 6.68%, supported by accelerated government capital spending\nand industrial estate development.<\/p>\n
Airlangga emphasised that the growth has tangibly improved public\nwelfare. The number of people in poverty fell to 7.45 million in March\n2026, or 8.07% of the population, the lowest level ever recorded.\nEmployment reached 148.19 million people, with 522,000 new jobs created\nbetween February and May 2026. The Open Unemployment Rate fell to 4.65%,\nwith the proportion of formal workers continuing to rise. \u201cGood growth\nis growth that creates jobs and reduces poverty. In this first semester,\nboth occurred simultaneously, and the jobs created are of increasing\nquality,\u201d Airlangga noted.<\/p>\n
Entering the second half, the Government sees positive signals from\nrecent indicators. July inflation was controlled at 2.88% year-on-year,\nthe Manufacturing PMI returned to expansionary territory at 50.2, and\nthe Consumer Confidence Index remained optimistic at 117.8. Investment\nrealisation in the first half reached Rp1,010.3 trillion, a 7.2%\nincrease year-on-year, with over half occurring outside Java. Downstream\nsector investments reached Rp300.1 trillion, absorbing around 1.45\nmillion direct workers. Market confidence remains strong, with S&P\nGlobal affirming Indonesia\u2019s BBB rating with a stable outlook.<\/p>\n
To maintain momentum, the government has prepared a Rp26.34 trillion\nstimulus package for the second half. This includes food aid for 33.24\nmillion beneficiaries, a 30% discount on train and sea transport fares,\nport service fee exemptions, and VAT borne by the government for economy\nclass flight tickets. Internship and vocational training programmes for\nyoung workers will also be expanded. In the energy sector, the\ngovernment has guaranteed no fuel price hikes until the end of 2026,\ndespite the average Indonesian Crude Price reaching US$90.46 per barrel\nin the first half, well above state budget assumptions. \u201cThe\ngovernment\u2019s principle is clear: people\u2019s purchasing power must not be\neroded. Therefore, we are maintaining fuel prices, stabilising food\nprices, and channelling stimulus appropriately,\u201d Airlangga asserted.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/government-unveils-new-strategies-to-propel-economy-in-second-half-1785977456", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }