Government Confident in Strong Economic Growth in Q1 2026

The government projects Indonesia’s economic growth to reach 5.5% in the first quarter of 2026. This optimism is driven by strong domestic consumption and solid fiscal performance. Coordinating Minister for the Economy Airlangga Hartarto stated that the national economy continues to show resilience amid global pressures. “In the first quarter, we may see it reaching higher or at least 5.5%,” Airlangga said in Jakarta on Monday (27/4/2026). Airlangga assessed that economic fundamentals remain intact, supported by controlled inflation and high consumer confidence. March 2026 inflation was recorded at 3.48%, still within target, while the Consumer Confidence Index stood at 122.9. Additionally, the trade balance has recorded a surplus for 70 consecutive months, valued at $148.2 billion. Domestic consumption also remains the main pillar, contributing 54% to gross domestic product (GDP). In the external sector, Indonesia is assessed to still be able to maintain export performance, including to the United States. Despite facing tariff policies, exports continue to grow double-digit, and market share remains maintained. “Even with tariffs, Indonesia still maintains its market in the US. Domestic consumption remains strong at 54% of GDP,” Airlangga said. From a stability perspective, the foreign debt ratio is recorded at 29.9% of GDP. Ownership of government securities is also dominated by domestic investors at 87.4%. Airlangga added that several global institutions still view Indonesia as a strong economy. The IMF considers Indonesia one of the bright spots in Asia, while FTSE Russell maintains Indonesia’s capital market status. Deputy Finance Minister Juda Agung also forecasts first-quarter economic growth at 5.5%. “The Ministry of Finance’s projection for first-quarter growth is estimated at 5.5%,” Juda said. According to Juda, this optimism is supported by strong APBN performance. State expenditure realisation grew 31.4% year-on-year, while tax receipts rose 20.7%. State spending in the first quarter has reached 21.2% of the APBN ceiling, higher than the same period last year at 17.1%. “With this spending and revenue, our budget deficit reaches 0.93%,” he said. From the tax side, the highest growth comes from VAT and Luxury Goods VAT, which rose 57.7%. This increase reflects strong consumption and business transaction activities. “With VAT and Luxury Goods VAT increasing quite significantly, along with consumer expectations, this makes us optimistic that in the first quarter it will grow 5.5%,” Juda said.