Economic Growth of 5.61%, Prabowo Effect
This achievement records the highest mark compared to previous periods. Firstly, this figure represents the highest economic growth in the last 14 quarters. Secondly, when viewed specifically for the first quarter period, this achievement is the highest in the last 13 years.
Indonesia’s economic growth in the first quarter of 2026 was also recorded as the highest among G20 countries. Second place was occupied by China, which recorded economic growth of 5.00%. Meanwhile, the US economy grew by 2.70%, and France by 1.10%. Nevertheless, this ranking is temporary pending the official data release from several other G20 member countries.
Amid ongoing global economic turbulence, Indonesia’s economy has managed to grow solidly. This achievement also disproves predictions from several international institutions, including the World Bank, which previously projected Indonesia’s economic growth to slow to 4.7% in 2026.
Sources of Growth
The economic growth achievement in the first quarter of 2026 serves as concrete evidence of the effectiveness of President Prabowo Subianto’s economic policy direction. This success is reflected in the resilience of public purchasing power in facing global dynamics, significant acceleration of government consumption through frontloading policies, and increased realisation of investments in various strategic national sectors.
BPS recorded that, from the expenditure side, household consumption grew by 5.52% (yoy). Then, Gross Fixed Capital Formation (PMTB) or investment grew by 5.96% (yoy). Meanwhile, government consumption grew significantly to 21.81% (yoy).
From the production side, BPS noted that 15 out of 17 sectors experienced positive growth. This means only 2 sectors contracted. Sectors contributing to positive growth include manufacturing, which grew by 5.04% (yoy), wholesale and retail trade by 6.26% (yoy), agriculture by 4.97% (yoy), and accommodation, food, and beverages by 13.14% (yoy).
Regarding investment realisation, the Ministry of Investment and Downstreaming recorded that investment realisation in the first quarter of 2026 reached Rp498.8 trillion, growing 7.2% (yoy), driven by balanced foreign direct investment (PMA) and domestic investment (PMDN), supported by the downstreaming sector at Rp147.5 trillion. PMA investment was recorded at Rp250 trillion or 50.1% and grew 8.5% (yoy).
BPS also released data showing that international trade performance continued the trade surplus for 71 consecutive months since May 2020. Cumulatively from January to March 2026, the trade surplus reached US$5.55 billion.
Prabowo Effect
The first quarter 2026 growth of 5.61% is part of the stages towards the 8% economic growth target as promised by President Prabowo. At least three important breakthroughs implemented by President Prabowo have had a significant impact on stronger economic growth.
First, optimising state revenue through improvements in tax administration, closing leakage gaps in the tax and customs sectors, and imposing administrative fines for misuse of forest areas. This governance strengthening directly expands fiscal space, enabling more massive and sustainable funding for pro-people programmes.
Up to 31 March 2026, state revenue grew strongly to Rp574.9 trillion or 10.5% (yoy). This revenue came from taxes at Rp394.8 trillion or 20.7% (yoy), customs duties Rp67.9 trillion, and non-tax state revenue (PNBP) Rp112.1 trillion.
Second, accelerating state expenditure at the beginning of the year (frontloading) and continuing efficiency policies for unproductive spending such as official travel, ceremonial events, and seminars. The results of this efficiency are allocated to more productive state spending that impacts economic growth.
Up to 31 March 2026, state expenditure realisation reached Rp815.0 trillion or 31.4% (yoy) compared to the same period in 2025, which was only Rp620.3 trillion. This expenditure includes ministry/institution spending (K/L) Rp281.2 trillion, non-K/L spending Rp329.1 trillion, and transfers to regions Rp204.8 trillion.
Third, President Prabowo optimised priority programmes, including accelerating investment through Danantara. Several priority programmes such as Free Nutritious Meals (MBG), Red White Village Cooperatives (KDMP), People’s Schools, and Garuda Excellence Schools.
In the first quarter of 2026, the MBG programme had 26,066 kitchens or up 2,800% (yoy), distributing 60 million portions per day or up 2,400% (yoy), and employing 1.3 million people or up 2,800% (yoy).
Several other programmes are also starting to be built, such as the construction of 30,000 physical outlets for Red White Village Cooperatives, 35 Red White Fisherman Villages, 4 Garuda Excellence Schools, and 93 People’s Schools.
The policy of accelerating state expenditure at the beginning of the year (frontloading) has proven to have a significant impact on accelerating national economic growth. Referring to BPS, in the first quarter of 2025, economic growth was recorded at 4.87% (yoy), where government consumption was still contracting by 1.22% (yoy).
In contrast, in the first quarter of 2026, the surge in government consumption reaching 21.81% (yoy) successfully drove national economic growth to 5.61% (yoy), confirming the effectiveness of state spending as an economic driver.
The high state spending growth at the beginning of the year (frontloading) did increase the budget deficit to 0.93% of GDP. However, this figure is still below the targeted deficit limit of 2.68% of GDP.
It needs to be clarified that there is a logical error among certain groups who accumulate the budget deficit linearly, namely by multiplying the budget deficit of 0.93 pe