Purbaya optimistic economy will grow towards 6 percent in second half of 2026

Finance Minister Purbaya Yudhi Sadewa is optimistic that Indonesia’s economic growth can increase to nearly 6 percent in the second half of 2026, after the national economy grew by 5.29 percent in the second quarter of 2026. Purbaya said the 5.29 percent growth achievement in the April-June 2026 period was a fairly good result, considering that external conditions at the time were less supportive, particularly due to the surge in global oil prices which impacted export activity. “If we look at it, being able to grow 5.29 percent is already quite good amidst such circumstances,” Purbaya said during a media briefing in Jakarta on Wednesday. For the second half of 2026, Purbaya said the government is optimising all engines of economic growth to increase the pace of expansion. According to him, a number of measures being prepared include adding liquidity to the economy and encouraging a reduction in deposit interest rates. “This includes pressing the interest rates requested by special mission vehicles (SMV) under the Ministry of Finance to fall to a low level so that banks can place or provide loans with lower interest rates,” he said. Regarding the contribution of the processing industry, whose share of gross domestic product (GDP) has declined, Purbaya assessed that this condition does not necessarily reflect a weakening of the manufacturing sector. The government, he continued, will utilise various policy instruments in the second half of 2026 to strengthen manufacturing sector growth, as he sees potential for a recovery in global demand. Concerning economic growth in the Maluku and Papua regions, which was recorded at 1.36 percent year-on-year (yoy), Purbaya acknowledged that the sources of growth in the area are not yet optimal. He said the government will coordinate with the Ministry of National Development Planning (Bappenas) to formulate a strategy to accelerate economic growth in the region. “We will study this more deeply, and we will ensure there is an economic growth engine that can be activated there,” said Purbaya. Statistics Indonesia (BPS) on Wednesday recorded that the Indonesian economy in the second quarter of 2026 grew by 5.29 percent compared to the same period last year. This figure is higher than the 5.12 percent growth in the second quarter of 2025, although it slowed from the 5.61 percent recorded in the first quarter of 2026. Growth occurred in almost all business fields, except for mining and quarrying, which contracted by 1.64 percent. Business fields that grew significantly were electricity and gas procurement at 10.81 percent, followed by accommodation and food and beverage provision at 10.60 percent. Meanwhile, the processing industry, which plays a dominant role in the Indonesian economy, grew by 4.52 percent, down from 5.68 percent in the second quarter of 2025. On a quarterly basis, the economy grew by 3.73 percent after experiencing a contraction of 0.77 percent in the first quarter. Thus, cumulative economic growth throughout the first half of 2026 reached 5.45 percent. BPS also noted that the Indonesian economy during the second quarter of 2026 showed positive growth across all provincial groups. The provincial group of Bali and Nusa Tenggara recorded the highest year-on-year growth at 6.10 percent, followed by Java (5.65 percent), Sulawesi (5.53 percent), and Sumatra (5.06 percent). Meanwhile, Kalimantan’s growth was recorded at 4.10 percent, and the lowest growth occurred in Maluku and Papua, at 1.36 percent.