Economic Growth in Second Half of 2026 Projected at Only 5.2 Per Cent

The Indonesian government is targeting an economic growth rate of 5.5 per cent for the second half of 2026. However, economists estimate that the economy will only grow by approximately 5.2 per cent during the latter half of the year, driven by the implementation of the government’s priority programmes.

“We expect the economy in the second half of 2026 to grow at 5 per cent, resulting in an annual economic growth for Indonesia of 5.2 per cent for the whole of 2026. We see the driving factors in the second half are still related to public sector investment, in line with national priority programmes and digital service investments, including data centres,” said Irman Faiz, Chief Economist of PT Bank Danamon Indonesia Tbk, to reporters.

It is noted that the Indonesian Minister of Finance, Suahasil Nazara, expressed optimism that Indonesia’s economic growth in the second half of 2026 could still exceed 5.5 per cent. This figure is considered to show sufficiently positive growth, although the government continues to push for a 6 per cent target amidst the challenges of global economic uncertainty.

Responding to this, Irman noted that the government’s target could potentially be realised. However, more intensive efforts are needed in implementing national priority programmes, which includes engaging the private sector.