BPS: Household Consumption and Investment Sustain Indonesia's Economic Growth

Head of Statistics Indonesia (BPS), Amalia Adininggar Widyasanti, stated that Indonesia’s economic fundamentals in the first quarter of 2026 remained robust, supported by household consumption, investment, and accelerated government spending. “The fundamentals of Indonesia’s economy throughout the January to March 2026 first quarter remained solid,” Amalia said in Jakarta on Tuesday (25 May 2026). BPS recorded Indonesia’s economy growing 5.61% year-on-year in Q1 2026, driven by consumer activity, investment, and government fiscal stimulus early in the year. Amalia explained that household consumption remained the main driver of growth, contributing over half of national expenditure. “Household consumption indeed supported more than half of Indonesia’s growing economy in Q1 2026,” she said. BPS noted household consumption grew 5.52%, contributing 54.38% to gross domestic product (GDP) and adding 2.94 percentage points to economic growth. According to Amalia, consumer purchasing power remained stable, supported by increased mobility during Ramadan and Eid al-Fitr. She added that consumption growth was evident in rising activity across trade, transport, restaurants, hotels, and digital transactions during the extended holiday period. Alongside household consumption, gross fixed capital formation (GFCF), or investment, grew 5.96% with a 28.29% contribution to GDP, adding 1.79 percentage points to Q1 2026 economic growth. Amalia said investment growth was driven by higher demand for capital goods such as machinery, equipment, and vehicles to support production activities and business expansion. “Imports of capital goods rose 14.27%. Foreign Direct Investment (FDI) and domestic investment (PMDN) grew 7.2%. Government capital expenditure also increased by 36.7%,” she said.