Airlangga optimistic that Indonesia's economy will grow 5.5 percent in Q1 2026
Jakarta (ANTARA) - Coordinating Minister for the Economy Airlangga Hartarto is optimistic that Indonesia’s economic growth in the first quarter of 2026 could reach 5.5 percent.
“For the first quarter, we are optimistic it will be greater than or equal to 5.5 percent. Then, by the end of the year, greater than or equal to 5.4 percent in line with the state budget projection,” Airlangga said when met at the Coordinating Ministry for the Economy office in Jakarta on Thursday.
He explained that this projection still heavily depends on global dynamics, which are currently shrouded in uncertainty.
The government will continue to adjust economic policies in line with global developments, including the impact of the Middle East conflict, which has the potential to affect energy price stability and supply chains.
Nevertheless, Airlangga continued, the government is maintaining the baseline economic growth for 2026 at around 5.4 percent as set in the state budget.
Furthermore, he detailed that this assumption also takes into account fluctuations in global oil prices. He mentioned that the average oil price purchased by Indonesia is around 76 US dollars per barrel.
“Every 1 dollar increase in fuel, the impact on the state budget is around more than Rp6 trillion. Net, that is, gains from high commodity export prices minus the subsidy amount, approximately Rp6 trillion. So if the figures are like that, they can still be absorbed by the state budget,” he explained.
Following the Government Working Meeting at the Presidential Palace Complex in Jakarta on Wednesday (8/4), the Coordinating Minister stated that the optimism for economic growth is supported by strong domestic fundamentals, particularly household consumption, which contributes around 54 percent to gross domestic product (GDP).
From a fiscal perspective, the state budget performance up to the first quarter of 2026 also shows a positive trend. Tax receipts up to March were recorded to have increased by 14.3 percent to around Rp462.7 trillion, while the manufacturing sector remains in an expansion phase.
In addition, national food resilience is assessed to remain maintained. Rice production in 2025 reached 34.7 million tons, with Bulog’s current rice stock at around 4.6 million tons.
The government is also continuing to prepare strategic policies to maintain the momentum of growth and economic stability, one of which is through the implementation of the B50 biodiesel programme starting 1 July 2026.
“The B50 policy is estimated to provide budget savings of up to Rp48 trillion,” said Airlangga.
On the other hand, the government is committed to maintaining fiscal discipline, including keeping the debt ratio at 40 percent of GDP, below the maximum legal limit of 60 percent.
Additionally, the budget deficit is also targeted to remain controlled at around 3 percent until the end of the year.