BI Projects Indonesia's Economy Could Grow Up to 5.7% in 2026

Bank Indonesia (BI) projects that Indonesia’s economic growth for the full year 2026 will remain solid, within a range of 4.9% to 5.7% year-on-year (yoy). This forecast follows a recorded growth of 5.29% yoy in the second quarter, which was a slowdown compared to the 5.61% yoy growth in the previous quarter. The central bank stated that the outlook is supported by domestic demand, in line with policies pursued by the Government and Bank Indonesia to continue driving 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 encouraging sustainable economic growth,” said Executive Director Ramdan Denny on Thursday (6/8/2026).

Economic growth in the second quarter was underpinned by domestic economic activity. Household consumption grew by 5.06% yoy, supported by the school holiday period and various National Religious Holidays (HBKN). Government consumption surged by 15.97% yoy, driven by increased realisation of personnel expenditure, including the 13th-month salary payment, and spending on goods and services related to the Free Nutritious Meal (MBG) programme. Consumption by Non-Profit Institutions Serving Households (LNPRT) also recorded high growth of 6.93% yoy. Investment grew by 6.87% yoy, primarily boosted by the vehicle sub-component and increased government and private investment realisation. Meanwhile, exports grew by 4.13% yoy, supported by demand from major trading partners.

From the production side, key sectors maintained positive growth. The Processing Industry, Trade, Construction, and Information and Communication sectors, which are the main contributors to economic growth, performed well in line with sustained domestic demand. The Accommodation and Food and Beverage sector also recorded positive growth, driven by higher hotel occupancy rates and the expanding reach of the Free Nutritious Meal programme beneficiaries. Spatially, the highest economic growth in the second quarter of 2026 was recorded in the Bali and Nusa Tenggara (Balinusra) region, followed by Java, Sulawesi, Sumatra, Kalimantan, and Maluku and Papua.