Factors Driving Economic Growth to Reach 5.61 Percent
The Central Statistics Agency (BPS) reported that economic growth for the period January to March 2026 increased by 5.61 percent year-on-year. Economic growth in the first quarter of 2025 was recorded at 4.87 percent.
“Indonesia’s economic growth in the first quarter of 2026 compared to the first quarter of 2025 grew by 5.61 percent year-on-year,” said BPS Head Amalia Adininggar Widyasanti, at the BPS building in South Jakarta, on Tuesday, 5 May 2026.
Amalia stated that based on the gross domestic product (GDP) for the first quarter of 2026 at current market prices (ADHB) it amounted to Rp 6,187.2 trillion, while at constant prices (ADHK) it was Rp 3,447.7 trillion.
From the production side, the business fields that provided the main contribution to GDP growth were processing, trade, agriculture, and construction. The business field with the highest growth was the processing industry, which grew by 1.03 percent. This was followed by trade at 0.82 percent, agriculture at 0.55 percent, and construction at 0.53 percent.
According to Amalia, the growth of the processing industry in the first quarter of 2026 was driven by domestic and foreign demand. For example, the food and beverage industry grew by 7.04 percent due to increased demand during Ramadan and Eid al-Fitr.
Meanwhile, from the expenditure side, the household consumption component experienced the highest growth of 5.52 percent. This was followed by gross fixed capital formation (PMTB) at 5.96 percent. The total contribution of both was 82.65 percent to the total GDP.
Previously, the Center of Reform on Economics (CORE) predicted Indonesia’s economic growth in the first quarter of 2026 to be in the range of 5.25-5.35 percent. In a report titled “Brief Report: Quarterly Economic Review Q1-2026” released by CORE on 29 April 2026, the main growth was supported by prospects for household consumption growth.
It was also supported by gross fixed capital formation and central government spending. “Meanwhile, for the whole of 2026, economic growth is estimated to be in the range of 4.9-5.1 percent,” as stated in the report, quoted on Sunday, 3 May 2026.
CORE noted that household consumption is estimated to grow quite strongly in the first quarter of 2026, but will weaken in subsequent quarters throughout 2026.
Meanwhile, Coordinating Minister for the Economy Airlangga Hartarto predicted that Indonesia’s economy will grow to reach 5.5 percent. This means its growth is greater than the fourth quarter of 2025 at 5.35 percent.
This prediction aligns with the forecast from the Ministry of Finance. “The Ministry of Finance’s projection for growth in the first quarter is estimated at 5.5 percent,” said Deputy Minister of Finance Juda Agung. This former Deputy Governor of Bank Indonesia stated that the reason behind this confidence is the increase in state revenues, particularly taxes.