Growing 5.61%, Indonesia's Economy Still Deemed Dependent on Stimulus

JAKARTA, KOMPAS.com - Indonesia’s economy grew 5.61% year-on-year in the first quarter of 2026. This figure is higher than the 5.39% growth in the fourth quarter of 2025 and represents the highest first-quarter achievement since 2013. The Central Statistics Agency (BPS) recorded that Indonesia’s Gross Domestic Product (GDP) at current market prices reached Rp 6,187.2 trillion in Q1 2026, while at 2010 constant prices it amounted to Rp 3,447.7 trillion. “The economic growth in Q1 2026 was partly supported by sustained household consumption,” said Amalia during a press conference in Jakarta on Tuesday (5 May 2026). From the expenditure side, household consumption continues to be the main pillar of the national economy. This component grew 5.52% (yoy) and contributed the largest growth source of 2.94% to GDP. BPS noted that household consumption accounts for more than half of Indonesia’s GDP structure, at 54.36%. She explained that the increase in public mobility during that period directly impacted sectors such as transportation, trade, and accommodation and food services. In addition, household consumption was also supported by various government stimuli, including THR or 14th-month salary payments, transport ticket discounts, and interest rate stability. Several indicators show an increase in public consumption activity. The number of domestic tourist trips grew 13.14% year-on-year, while land transport passengers increased 20.20%. Besides household consumption, government consumption also recorded high growth of 21.81% (yoy). BPS stated that the government consumption expenditure component was the highest growing among all expenditure components. Meanwhile, Bank Indonesia (BI) stated that the rise in government consumption was driven by increased realisation of employee spending through 14th-month salary or THR payments and priority government programme expenditures, particularly the Free Nutritious Meals (MBG) programme. The Coordinating Ministry for Economic Affairs recorded state expenditure realisation up to Q1 2026 at Rp 815 trillion or 21.2% of the state budget. Implementation of the MBG programme up to March 2026 has also reached Rp 51 trillion. The government stated that various stimuli and policies implemented at the beginning of the year were able to serve as a buffer against global turbulences. One of them was through the 2026 Eid al-Fitr transport fare discount programme, which encouraged an increase in passenger numbers. The Coordinating Ministry for Economic Affairs recorded that the number of economy-class train passengers grew 7.6% year-on-year, sea transport rose 2.56%, and ferry transport increased 13.7%. The programme was supported by a state budget subsidy realisation of Rp 169 billion. People’s Business Credit (KUR) was recorded at Rp 96.18 trillion or 34.41% of the target, Agricultural Machinery and Equipment Credit (Alsintan) at Rp 55.92 billion or 23.19%, Labour-Intensive Industry Credit (KIPK) at Rp 82.93 billion or 15.09%, and Housing Programme Credit reaching Rp 14.92 trillion or 42.89% of the target. The government assesses that the Q1 2026 economic growth reflects the continued strength of domestic economic fundamentals amid global dynamics. The Coordinating Ministry for Economic Affairs mentioned that the 5.61% growth exceeded that of most G20 countries such as China and South Korea, and was above projections from various international institutions. “Then the latest economic indicators are also positive in prospect, namely inflation in April at 2.42%, back within the 2.5 plus minus 1% range. Then the Consumer Confidence Index at 122.9, the trade balance also at US$3.32 billion and this is a surplus for 71 consecutive months. From the credit growth position, third-party funds also increased to 13.55% yoy, and credit growth at 9.49% yoy as well,” said Airlangga.