High Economic Growth but Weakening Rupiah, Investors Not Convinced?
JAKARTA, KOMPAS.com – Indonesia’s economic growth in the first quarter of 2026 reached 5.61 per cent year-on-year (YoY). This figure represents the highest first-quarter growth achievement in the last 13 years.
Senior Economist at the Institute for Development of Economics and Finance (INDEF), Tauhid Ahmad, assesses that the high economic growth in the first three months of this year does not yet fully reflect the strengthening of national economic fundamentals.
According to him, the first-quarter 2026 economic growth was largely driven by the seasonal momentum of Ramadan and Eid al-Fitr, as well as a surge in government consumption through the Free Nutritious Meals (MBG) programme.
Nevertheless, the most dominant factor came from the increase in government consumption since the implementation of the MBG programme began.
In this regard, the government has allocated around Rp 30 trillion per month to run the programme.
Thus, during the first three months of this year, the additional state expenditure is estimated to reach Rp 90 trillion to Rp 100 trillion.
However, Tauhid warns that the positive effect of the MBG programme on economic growth is potentially only temporary.
He assesses that the MBG effect is likely to start diminishing in the first quarter of 2027 as it enters the base calculation for growth from the previous year.
In addition to the MBG factor, the influence of the base year or low economic growth base in 2025.
On the other hand, there is an adjustment to the industrial data base in the calculation of gross domestic product (GDP) that also affects the economic growth figure.
“There is a base year factor because last year’s growth was low. In addition, there is an addition to the data base for calculations, especially in the industrial sector. That also has an influence,” he said.
Without the base year factor and MBG, economic growth during the Ramadan and Eid momentum is usually only in the range of 5.3 per cent to 5.4 per cent.