Banyumas Raya Economy Grows Amid Drought Risk in Second Half of 2026
The economy of the Banyumas Raya region grew in the first quarter of 2026, driven by strengthening household consumption, according to the Bank Indonesia (BI) Representative Office in Purwokerto. The growth occurred despite increasing drought risks projected for the second half of the year.
Head of BI Purwokerto Aswin Gantina stated that the economic expansion was supported by a rise in the provincial minimum wage (UMP), the disbursement of holiday allowances (THR), and increased economic activity during Ramadan and Idul Fitri. Growth was recorded across the four districts under the office’s jurisdiction: Banyumas, Cilacap, Banjarnegara, and Purbalingga.
Key sectors contributing to the growth included the processing industry, agriculture, forestry and fisheries, trade, and construction. From the expenditure side, the economy was bolstered by robust investment, government consumption, and household spending.
Regarding price stability, Purwokerto and Cilacap experienced deflation in July 2026. This was primarily driven by lower petrol prices, as well as price drops in mobile phones, purebred chicken eggs, and purebred chicken meat. However, the deflation was partially offset by rising prices of shallots, bird’s eye chillies, red chillies, and gold jewellery.
Aswin noted that the deflationary figures remain within the national inflation target of 2.5 percent, plus or minus one percent. Looking ahead, BI is closely monitoring climate conditions for the second half of 2026, which indicate a potential for drought lasting until the end of September.
To mitigate the impact on food production and price stability, Bank Indonesia is coordinating with local governments on several measures. These include ensuring the adequacy of agricultural irrigation through optimising irrigation networks and pump systems, managing water sources, and promoting drought-adaptive crop varieties.
Additional efforts involve developing food production centres, optimising agricultural land, fostering young and millennial farmer groups, and implementing digital farming to enhance productivity and supply continuity. BI is also intensifying assistance to farmer groups, strengthening inter-regional cooperation, and continuing market operations and the Cheap Food Movement to maintain the affordability of strategic food commodities. Monitoring of prices against retail price ceilings and the impact of distribution and logistics cost adjustments on consumer prices will also be reinforced.