Economy Grows 5.61 Per Cent, But Not All Sectors Feel the Impact
JAKARTA, KOMPAS.com - Bank Permata’s Chief Economist Josua Pardede assesses that Indonesia’s 5.61 per cent annual economic growth in the first quarter of 2026 still reflects a robust economic expansion.
However, behind this figure, conditions on the ground are not yet fully felt evenly across all business sectors and societal groups.
“Annual growth compares Q1 2026 with Q1 2025, which had a relatively low base, making the yearly figure appear strong. Meanwhile, quarterly contraction compares with Q4 2025, which is typically high due to year-end spending and project realisations,” he told Kompas.com on Friday (8/5/2026).
According to Josua, the high annual growth does not contradict the 0.77 per cent quarterly economic contraction. He explains that both data points use different comparison bases.
Household consumption was recorded at 5.52 per cent growth, investment or gross fixed capital formation (GFCF) rose 5.96 per cent, while government consumption jumped 21.81 per cent.
However, he warns that real conditions on the ground are more complex. Price pressures, rupiah weakening, and rising energy costs are beginning to burden households and the business world.
“Signals from the manufacturing sector in April also show weakness, with the manufacturing PMI dropping to 49.1 and raw material cost pressures rising to the highest level in four years due to the Middle East conflict,” he said.
Meanwhile, construction and building investments are also driven by government capital expenditure for priority programmes such as MBG and Kopdes Merah Putih.
“These programmes require kitchens, warehouses, distribution facilities, supporting buildings, equipment, and logistics networks,” he said.
Nevertheless, Josua reminds that the contribution of MBG and Kopdes Merah Putih to national investment must be placed in proper proportion.
According to him, gross fixed capital formation (GFCF) overall is still more influenced by infrastructure projects, private investments, property development, and spending on machinery and production equipment.