Indonesia's Economy Grows 5.29% in Q2 2026, BI Confident of Year-End Target

Indonesia’s economic growth for the second quarter of 2026 was recorded at 5.29% year-on-year (yoy), following growth of 5.61% yoy in the previous quarter. Bank Indonesia (BI) forecasts that Indonesia’s overall economic growth for 2026 will remain solid, within the range of 4.9% to 5.7% yoy. Executive Director of Bank Indonesia’s Communication Department, Ramdan Denny Prakoso, stated that this projection is underpinned by domestic demand, in line with policies pursued by the Government and Bank Indonesia to continue driving economic growth. “Bank Indonesia continues to strengthen its policy mix through monetary, macroprudential, and payment system policies that are closely synergised with Government policies to maintain stability while continuing to encourage sustainable economic growth,” Ramdan said. From the expenditure side, economic growth in the second quarter of 2026 was supported by domestic economic activity. Household consumption grew by 5.06% yoy, driven by the school holiday period and various National Religious Holidays (HBKN). Government consumption grew by 15.97% yoy, sourced from increased realisation of personnel expenditure, including the 13th-month salary payment, as well as spending on goods and services related to the Free Nutritious Meals (MBG) programme. Consumption by Non-Profit Institutions Serving Households (LNPRT) recorded high growth of 6.93% yoy. Investment grew by 6.87% yoy, primarily driven by growth in the vehicle sub-component and both government and private investment, in line with increased capital investment realisation. Meanwhile, exports grew by 4.13% yoy, supported by demand from major trading partners. From the business field perspective, various main sectors continued to perform well. The Processing Industry, Trade, Construction, and Information and Communication sectors, as the main contributors to economic growth, grew solidly in line with sustained domestic demand. Additionally, the Accommodation and Food and Beverage sector also posted positive growth, in line with increased hotel occupancy rates and the expanding reach of MBG beneficiaries. Spatially, the highest economic growth in the second quarter of 2026 was recorded in Bali and Nusa Tenggara, followed by Java, Sulawesi, Sumatra, Kalimantan, and Maluku and Papua.