First-quarter 2026 Economic Growth Compared with 2025: What's the Difference?

Jakarta — Indonesia’s economy grew 5.61 per cent year on year in the first quarter of 2026, a figure that, while impressive, has yet to be felt by the grassroots, according to economist M Rizal Taufikurahman, head of the Macro Economics and Finance Centre at the Institute for Development of Economics and Finance (Indef). The 2026 pace contrasts with Q1 2025, when growth slowed and remained below 5 per cent, but with different drivers and pressures. Rizal explained that the main difference between the first quarters of 2025 and 2026 lies in the quality of growth. Last year’s early expansion was underpinned by household consumption, electoral activity, and commodity exports. By contrast, 2026 is clouded by global headwinds, a weakening rupiah, high interest rates, and a more pronounced squeeze on middle-class purchasing power. ‘As a result, growth appears to be increasingly supported by government spending and consumption by higher-income groups, while the poor curb their spending,’ he told Kompas.com on 19 May 2026. In Q1 2026, the economy grew 5.61 per cent on an annual basis. The performance marks the highest Q1 reading in 13 years. Household consumption remained the main driver of national growth, contributing 2.94 percentage points. Government spending also expanded at the start of the year, part of a strategy to accelerate public expenditure so the impact broadens more evenly across the year. The pattern of government spending — previously concentrated toward year-end — has been redirected to earlier realisation to support activity more effectively. Rizal noted that it is reasonable some people feel the growth has not yet fully materialised. Statistically, the economy can grow, but public perception will differ if jobs slow, prices rise, and real incomes are squeezed. The challenge today is not only to chase high growth, but to ensure that growth is high-quality and evenly distributed.