Economy Grows 5.29%: Prabowo Criticised and the Reality
Indonesia’s economy grew by 5.29% year-on-year in the second quarter of 2026, according to the Central Statistics Agency (BPS). This marks the highest Q2 growth since 2022 and places Indonesia among the top-performing G20 countries. Cumulatively, growth for the first half of 2026 reached 5.45%, exceeding the state budget target of 5.4%.
From the production side, the main contributors were the manufacturing, agriculture, trade, construction, and mining sectors. The highest growth was recorded in electricity and gas procurement, accommodation and food services, and information and communication. On the expenditure side, household consumption and investment contributed 82.68% of GDP, with government consumption posting the highest growth at 15.97%, driven by increased personnel and goods spending.
The government argues this solid growth proves its economic policies are on track despite global uncertainty and geopolitical tensions. Priority programmes such as free nutritious meals, village cooperatives, and the construction of public schools and hospitals are credited with creating a multiplier effect. By mid-2026, state spending had reached Rp1,656 trillion, or 43% of the budget ceiling, while revenues hit Rp1,459.4 trillion, keeping the deficit at a manageable 0.76% of GDP.
BPS data also showed household consumption grew 5.06%, contributing over half of GDP, while investment rose 6.87%. The Ministry of Investment reported Q2 investment realisation of Rp511.8 trillion, a 7.1% year-on-year increase. The government contends this demonstrates economic resilience not reliant on short-term portfolio flows but on a solid real sector foundation.
Growth was distributed beyond Java, with Bali and Nusa Tenggara leading at 6.10%, followed by Java at 5.65%, Sulawesi at 5.53%, and other regions. This was supported by the disbursement of Rp357.4 trillion in regional transfers by the end of June. Social indicators also improved, with the open unemployment rate falling to 4.65%, the poverty rate dropping to 8.07%, and the Gini ratio maintained at 0.368, which the government cites as evidence of inclusive and quality growth.
The government claims that negative narratives about the economy under President Prabowo Subianto are unfounded. It highlighted that while geopolitical tensions in the Middle East have forced many countries to raise energy and food prices, Indonesia has maintained price stability, including for widely used petrol.