Airlangga Targets Indonesia's Q1 2026 Economy to Grow 5.5%, Here Are the Supports

The government is targeting Indonesia’s economic growth in the first quarter of 2026 to reach 5.5 per cent, amid ongoing global uncertainties. Coordinating Minister for the Economy Airlangga Hartarto stated that this target aligns with the full-year economic growth projection set in the 2026 State Budget. “For the first quarter, we are optimistic it will be higher or at least 5.5 per cent. Then, by year-end, it will be higher or at least 5.4 per cent in line with the State Budget estimate,” Airlangga said when met at the Coordinating Ministry for the Economy office in Jakarta on Thursday (9/4/2026). According to him, this projection still depends on global dynamics, including conflicts in the Middle East that could affect energy prices and the global supply chain. Nevertheless, the government is maintaining the baseline economic growth for 2026 at 5.4 per cent. “Every US$1 increase in fuel prices impacts the State Budget by around Rp6 trillion or a bit more, net. That is, the gains from higher commodity export prices minus the subsidy amount, roughly Rp6 trillion. So, figures like that can still be absorbed by the State Budget,” he explained. On the domestic front, household consumption remains the main pillar of growth, contributing about 54 per cent to gross domestic product (GDP). Fiscal performance also shows a positive trend. Up to March 2026, tax receipts grew 14.3 per cent to around Rp462.7 trillion, while the manufacturing sector remains in an expansion phase. To sustain the growth momentum, the government is preparing several strategic policies, including the implementation of B50 biodiesel starting 1 July 2026. “The B50 policy is estimated to provide budget savings of up to Rp48 trillion,” Airlangga said. On the fiscal side, the government is also ensuring budget discipline remains intact. The debt ratio is kept around 40 per cent of GDP, below the maximum limit of 60 per cent as per the law. In addition, the State Budget deficit is targeted to stay around 3 per cent until year-end.