Government ramps up spending to maintain economic momentum in Q2

Coordinating Minister for the Economy Airlangga Hartarto has assured that the momentum of economic growth in the second quarter of 2026 will be maintained by ramping up government spending. State expenditure will be maximised as a fiscal strategy, given that this period lacks seasonal factors such as major religious holidays that usually drive consumption. “For growth in the second quarter, one of the areas we will intensify is government spending because last year’s baseline for government expenditure was low, and in the first quarter, government spending served as a support, and it will also act as a support in the second quarter, particularly to maintain people’s purchasing power,” said Airlangga during a press conference in Jakarta on Tuesday. The minister explained that the government has prepared several stimuli, including the disbursement of the 13th-month salary for civil servants (ASN) with an allocation of around Rp55 trillion. In addition, the acceleration of food assistance will be intensified from April to June 2026, reaching 33.2 million beneficiary families (KPM). The government is also ensuring the continuity of energy subsidies and compensations in the 2026 state budget amounting to Rp356.8 trillion. “Fiscal policy will be optimised to maintain the momentum of achieving the growth target and to serve as a buffer against global turbulences,” he clarified. In the education and housing sectors, the government is allocating budgets through the school revitalisation programme worth Rp13.4 trillion, as well as the implementation of the three million houses programme via the Housing Financing Liquidity Facility (FLPP) scheme valued at Rp37.1 trillion. Furthermore, the government is preparing various deregulation measures through the Task Force for Accelerating Economic Growth Enhancement. With these various steps, the government is optimistic that economic growth in the second quarter will remain stable and contribute to achieving the annual target for 2026. For information, the Central Statistics Agency (BPS) recorded Indonesia’s economic growth at 5.61 percent year-on-year (yoy) in the first quarter of 2026. Meanwhile, on a quarterly basis, the economy contracted by 0.77 percent (quarter-to-quarter/qtq) compared to the fourth quarter of 2025.