Reasons for Indonesia's Economy Growing 5.61% in Q1-2026: From MBG to Civil Servant THR!

Indonesia’s economic growth in the first quarter of 2026, reaching 5.61% year-on-year, was supported by surging government spending and the realisation of gross fixed capital formation (PMTB).

Head of the Central Statistics Agency (BPS) Amalia Adhininggar Widyasanti stated that household consumption remains the main driver of growth, as its contribution to GDP still dominates at 54.36%, with growth of 5.52%.

“The largest contribution from household consumption at 54.36% and growing 5.52%,” said Amalia during a press conference at the BPS head office in Jakarta on Tuesday (5/5/2026).

Nevertheless, she emphasised that the fastest growth supporting the economy in the first quarter of 2026 was government consumption, which grew 21.81%, although its contribution to GDP was 6.72%.

This was particularly driven by increased realisation of employee expenditure through THR payments, as well as goods and services spending, especially goods spending delivered to the public in the form of the Free Nutritious Meals (MBG) programme.

“The expenditure component with the highest growth is government consumption at 21.81%, due to the realisation of the 14th salary or THR, goods and services spending delivered to the public,” said Amalia.

Following that is the growth of consumption by Non-Profit Institutions Serving Households (LNPRT) at 6.28%, although its contribution to GDP is 1.40%.

Then, investment or PMTB grew 5.96% with the second largest contribution to GDP at 28.92%. Exports only managed to grow 0.90% with a contribution of 21.22%.