DJPb assesses Papua's economy shows recovery trend in 2026

The Regional Office of the Directorate General of Treasury (DJPb) for Papua Province assesses that the economy in the Tanah Papua region is showing a recovery trend in 2026 despite dynamics in each province. Head of the DJPb Regional Office for Papua Province, Izharul Haq, in Jayapura on Sunday, said the economic recovery is reflected in improved economic growth in several areas, relatively controlled inflation, increased government spending disbursement, and a decline in poverty rates in most provinces across Tanah Papua. “In general, regional economic indicators are pointing in a positive direction, although challenges in some areas still require attention,” he said. According to Izharul, South Papua Province recorded economic growth of 3.93 per cent year-on-year, whilst Central Papua managed to reduce its economic contraction from minus 35.59 per cent to minus 8.38 per cent, indicating an improvement compared to the previous period. “In terms of price stability, inflation in Papua Province fell to 2.79 per cent from 3.38 per cent previously, whilst South Papua also eased to 2.17 per cent from 3.34 per cent,” he stated. He explained that inflation in Highland Papua remains the highest at 4.84 per cent, a condition influenced by high goods distribution costs due to dependence on air transport affected by rising fuel prices. The economic recovery trend is also visible in welfare indicators showing positive developments. Poverty rates have declined in almost all regions of Papua, except Central Papua, which still recorded an increase in poverty figures. Meanwhile, income inequality has also continued to improve in several provinces. Highland Papua even recorded a Gini ratio of 0.347, lower than the national average of 0.363, indicating a more equitable income distribution. “In the agricultural sector, Papua’s Farmer Exchange Rate (NTP) reached 100.89, above the 100 mark, reflecting relatively good purchasing power and farmer welfare. However, Highland Papua still faces challenges as its NTP is below 100, meaning farmers’ incomes are not yet fully able to cover production costs and household needs,” he said. He explained that increased central government spending and regional transfers are expected to continue driving economic activity, thereby accelerating economic recovery and improving community welfare across Papua. “Government spending is expected to have a multiplier effect on the regional economy so that the economic recovery can proceed more robustly and evenly,” he said.