CORE: 5.61 Percent Growth in Q1 as Initial Capital for Indonesia's Economy
Researcher from the Center of Reform on Economics (CORE), Yusuf Rendy Manilet, assesses the 5.61 percent economic growth in the first quarter of 2026 as a positive initial capital for preserving momentum, with strengthening investments and more sustainable economic activities.
“For the 5.61 percent growth in Q1-2026, the figure does indeed appear strong. It can even be said to be above expectations,” said Yusuf when contacted by ANTARA in Jakarta on Tuesday.
Nevertheless, he conveyed that upon closer examination, there are several temporary factors concentrated at the beginning of the year.
He exemplified Ramadan and Eid al-Fitr 1447 Hijriah, which fell entirely in the first quarter, thus concentrating the consumption boost directly in that period.
Additionally, robust government spending at the start of the year, along with a relatively low comparison base from the previous year, also supported the growth achievement.
“So it’s reasonable that the figure looks high. This means that for sustainability, we need to be a bit more cautious. Especially since, on a quarterly basis, the economy actually contracted. That’s a signal that the momentum is not as strong as it appears in the annual figures,” he stated.
Looking ahead, he believes challenges still need to be anticipated, particularly from external pressures such as global energy prices and a still-weak exchange rate.
If those conditions persist, the impact could affect inflation and people’s purchasing power, which has hitherto been the main pillar of growth.
Therefore, he said, this first-quarter achievement is seen as good initial capital for keeping growth within the annual target range.
According to him, the impetus in subsequent quarters needs to start being supported by investments and more structural economic activities, no longer relying on seasonal factors.
He added that investment data is actually quite positive and its momentum needs to be maintained through project acceleration, regulatory certainty, and a conducive business climate so that the private sector continues to expand.
On the other hand, attention to purchasing power and employment is also important, given that first-quarter consumption was heavily influenced by seasonal factors such as THR bonuses and Eid spending, which are temporary.
Meanwhile, from the industrial side, pressures are beginning to emerge, reflected in early indications of the manufacturing PMI below the expansionary level, even though this sector plays a key role in creating formal employment.
Thus, the government needs to ensure that pressures in the real sector do not continue, while anticipating risks to inflation and the exchange rate, as well as export-import dynamics, to maintain economic stability moving forward.
“For risks, what I think needs to be most guarded against is still the combination of inflation and the exchange rate. Currently, inflation is still under control, but producer-level cost pressures are starting to rise. This usually emerges in consumer prices with a time lag,” he explained.
On the other hand, added Yusuf, the weakening rupiah increases import costs, particularly for raw materials and energy. This needs to be anticipated because it can pressure purchasing power while adding to the burden on businesses.
“Beyond that, there are also pressures from the external side. Export performance is starting to slow while imports are rising, so the contribution to growth is not as strong as before. This could impact the external balance and ultimately feed back into exchange rate stability,” he said.
Separately, the Central Statistics Agency (BPS) recorded that Indonesia’s economy grew by 5.61 percent (year-on-year/yoy) in the first quarter of 2026, with Gross Domestic Product (GDP) on a constant price basis reaching Rp3,447.7 trillion, and on a current price basis recorded at Rp6,187.2 trillion.
“Supported by domestic economic activities, Indonesia’s economy grew by 5.61 percent in the first quarter of 2026,” said BPS Chief Amalia Adininggar Widyasanti in Jakarta on Tuesday.