Indonesian Investment Grows 7.22 Per Cent in Q1-2026, Government Strengthens Licensing Reforms and KBLI 2025
The Indonesian government is accelerating structural reforms to create an investment climate that is conducive, adaptive, and responsive to global economic dynamics. These steps involve refining policies and risk-based business licensing systems capable of accommodating technological advancements and new business models.
Coordinating Minister for Economic Affairs, Airlangga Hartarto, stated that Indonesia’s economic fundamentals remain solid despite global uncertainty. He noted that the economic growth momentum in the first quarter of 2026 was supported by household consumption, the distribution of religious holiday allowances (THR), and the acceleration of state spending through realised stimulus reaching Rp 809 trillion.
Investment realisation in Q1-2026 reached Rp 498.79 trillion, representing a 7.22 per cent year-on-year growth, surpassing set targets. Labour absorption also increased significantly to 706,569 people, an 18.93 per cent rise compared to the same period the previous year. Airlangga explained that this achievement demonstrates the tangible contribution of investment to job creation and economic equality, including increased investment outside of Java.
On the monetary side, Bank Indonesia maintained the benchmark interest rate at 4.75 per cent to preserve exchange rate stability amidst global volatility. Meanwhile, the March 2026 Manufacturing PMI stood at 50.1, remaining in an expansionary phase, with the Q1 average staying above 50 and remaining competitive within the ASEAN region.
External performance also showed a positive trend, with a trade surplus continuing for 70 consecutive months and foreign exchange reserves reaching USD 148.2 billion. Regarding fiscal matters, the state budget deficit as of March 2026 was recorded at a low 0.93 per cent of Gross Domestic Product (GDP).
To maintain this momentum, the government has established the Task Force for the Acceleration of Government Programmes to Support Economic Growth (P3M-PPE) via Presidential Decree Number 4 of 2026. This task force is responsible for ensuring that policies can address investment bottlenecks and improve the ease of doing business.
Furthermore, the government is encouraging the implementation of the 2025 Indonesian Standard Industrial Classification (KBLI) as part of strengthening the business licensing system. This KBLI adjustment, determined by the Central Bureau of Statistics (BPS), aims to accommodate new economic developments, including the digital sector, artificial intelligence, climate change mitigation, and innovations in the financial services sector, such as bullion banks.
Airlangga announced a Joint Circular Letter between the Minister of Investment and Downstreaming/Head of BKPM, the Minister of Law, and the Head of BPS to serve as technical guidance for the KBLI implementation without disadvantaging businesses. He explained that there are two main mechanisms for implementing KBLI 2025: automatic adjustment through system integration between the Directorate General of Legal Administrative Affairs and the Online Single Submission (OSS), and manual adjustment by business actors in the event of changes to their articles of association.