Indonesia's Economic Growth Projected to Slow in Q2 to 5.1-5.5 Percent

JAKARTA, KOMPAS.com - PT Bank Mandiri (Persero) Tbk (BMRI) projects that the national economy in the second quarter of 2026 will grow more slowly than the previous quarter.

Head of the Macroeconomic and Financial Market Research Department at Bank Mandiri, Dian Ayu Yustina, stated that the national economy is expected to grow in the range of 5.1-5.5 percent in the second quarter of this year.

This projection is lower than the realisation in the first quarter of 2026, which grew significantly to 5.61 percent.

“We see an opportunity for Indonesia’s economic growth to remain stable in the range of 5.1 to 5.5 percent in the second quarter of 2026,” she said during the Bank Mandiri Macro and Market Brief Q2-2026 presentation held virtually on Monday (11/5/2026).

She explained that the slowdown in economic growth in the second quarter is mainly caused by seasonal factors that only occur in the first quarter, such as the New Year, Ramadan, and Idul Fitri.

Additionally, there is a boost from government spending growth that surged by 21.8 percent. This increase was driven by the acceleration of government programme realisations as well as a low base effect due to APBN efficiency in the same period last year.

“There are several factors catalysing economic growth that will not recur in the second, third, or fourth quarters, such as the Eid al-Fitr period, of course. This means growth in the second quarter may ease,” she clarified.

Dian continued that entering the second quarter, several economic indicators such as the retail sales index and consumer confidence index have begun to decline.

This is because various global dynamics, one of which is caused by the geopolitical war in Iran, are creating negative sentiment among the public, thereby affecting perceptions of the domestic economy.

Furthermore, the increase in labour absorption that has been occurring since the beginning of this year is also expected to continue in the second quarter.

“We see continued support from various policies. This should be able to sustain future growth,” said Dian.

Overall, Bank Mandiri estimates that national economic growth in 2026 will be 5.18 percent, higher than the previous year’s realisation of 5.11 percent.

Thereafter, Indonesia’s economy in 2027 is projected to grow higher at 5.35 percent.