5.61 Percent Growth: How and for Whom?
Perhaps the spirits of the nation’s founders are currently held captive, unable to find a fitting resting place after so many years since their passing. In the preamble to the 1945 Constitution, they entrusted noble aspirations: to protect the entire nation, advance the general welfare, and realise social justice for all the people of Indonesia.
However, after more than seven decades of independence, that mandate increasingly feels like a constitutional promise that is repeatedly recited but equally often betrayed by development practices that drift away from the people.
Today, the state is busy celebrating improvements in statistical figures, while the people confront the harsh realities of mere survival.
The government, through Finance Minister Purbaya Yudhi Sadewa, has just delivered optimistic news: Indonesia’s economy grew by 5.61 percent in the first quarter of 2026.
This figure is touted as a sign that Indonesia has successfully escaped the “5 percent growth trap”.
From a macroeconomic perspective, this claim sounds impressive. Yet the underlying issue is simple: why, amidst growth described as high, are the people increasingly complaining about the heavy burden of living?
Among the middle class, consumption is being curtailed due to economic uncertainty.
In rural areas, farmers face high production costs and ever-thinner margins.
In cities, the younger generation finds it increasingly difficult to secure decent jobs with adequate incomes.
There is a widening chasm between the country’s economic figures and what the people are experiencing.
The most fundamental problem with the 5.61 percent figure does not lie in the validity of the statistics, but in what those statistics conceal.
Gross Domestic Product (GDP) is an aggregate number. It records total economic activity but does not automatically explain the distribution of its benefits.
GDP can grow high while the majority of the people do not feel any improvement in welfare.
Data for the first quarter of 2026 shows that the 5.61 percent growth was strongly supported by a surge in government consumption of 21.8 percent.
This spending was driven by bonuses for civil servants, accelerated public expenditure, and financing for the Free Nutritious Meals (MBG) programme.
Household consumption did grow by 5.52 percent, and investment rose by 5.96 percent, but the state’s fiscal injection was a decisive accelerator in shaping the headline growth figure.
In other words, today’s growth engine is heavily reliant on state injections. The economy appears to be advancing, but part of its momentum is propped up by fiscal pushes, not solely by transformations in national economic productivity.
In the short term, this can create an impression of progress. In the long term, such dependency harbours structural vulnerabilities.