Bank Indonesia Projects RI Economy to Grow Up to 5.7 Percent in 2026 Despite Q2 Slowdown

Bank Indonesia (BI) remains optimistic about the prospects for the national economy throughout 2026. Although Indonesia’s economic growth in the second quarter of 2026 slowed compared to the previous quarter, the central bank projects full-year economic growth to remain within a positive range of 4.9 to 5.7 percent. The projection is supported by strong domestic demand, which is expected to continue being the main driver of the national economy. Executive Director of Bank Indonesia, Ramdan Denny, stated that Indonesia’s economic growth in the second quarter of 2026 was recorded at 5.29 percent year-on-year (yoy). Although lower than the first quarter of 2026 growth of 5.61 percent (yoy), this achievement is considered to still demonstrate the resilience of the domestic economy. Ramdan Denny explained that the optimism is based on the prospect of domestic demand remaining strong, supported by various government and Bank Indonesia policies aimed at maintaining stability while encouraging economic growth. “Bank Indonesia continues to strengthen its policy mix through monetary, macroprudential, and payment system policies that synergise closely with Government policies to maintain stability while continuing to encourage sustainable economic growth,” said Ramdan Denny. According to him, this policy combination is expected to maintain the momentum of national economic growth throughout the year even though global economic conditions still face various challenges. Bank Indonesia noted that economic growth in the second quarter of 2026 was still supported by domestic economic activity, especially household consumption and investment. From the expenditure side, household consumption grew by 5.06 percent (yoy). This growth was driven by increased public activity during the school holiday period and the momentum of the National Religious Holiday (HBKN). In addition to household consumption, government consumption also showed a significant increase. In the second quarter of 2026, government consumption grew by 15.97 percent (yoy). The increase was supported by the rising realisation of personnel expenditure, including the payment of the 13th salary, as well as spending on goods and services related to the implementation of the Free Nutritious Meal Programme (MBG).