Services sector props up Indonesia's Q2 2026 economic growth: PIER

The Permata Institute for Economic Research (PIER) noted that the services sector was a key pillar of Indonesia’s economic growth in the second quarter of 2026, amid pressures on several other main sectors. Head of Industry and Regional Research at Permata Bank, Adjie Harisandi, said the accommodation and food and beverage sector grew by 10.6 percent, linked to increased economic activity driven by various government programmes, including the Nutrition Fulfilment Service Unit (SPPG). “The services sectors are currently still providing considerable support to economic growth, and the government’s role through various programmes also tends to feed heavily into services-related sectors,” Adjie said during the PIER Q2 2026 Economic Review, accessed online in Jakarta on Monday. Adjie explained that three major sectors contributed significantly to national economic growth: food and beverage, chemicals and pharmaceuticals, and metals and electronics. The food and beverage industry grew by 6.5 percent, while the metals and electronics industry expanded by 8 percent. The growth in the food and beverage industry was considered linked to domestic consumption and support from government programmes. Meanwhile, on the chemicals and pharmaceuticals side, PIER observed an impact from the war involving the United States, Iran, and Israel, which exerted considerable pressure, particularly on rising raw material prices and disrupted raw material supplies, resulting in growth of only 5 percent in the second quarter of 2026. Overall, the wholesale and retail trade sector was one of the largest sectors strengthening the economy, growing by 6.4 percent. This growth further reinforced the role of consumption and trade activity in maintaining economic momentum. Adjie also noted high growth in the electricity and gas sector, which reached 10.8 percent in Q2 2026. However, this figure needs to be viewed considering the base effect from the previous period. In Q1 2025, electricity growth was influenced by an electricity tariff discount programme, creating a different base. “If we look at the first half, it only grew by 4.83 percent, which is below the national economic growth rate, indicating that the growth of these sectors is consuming too much energy,” he said. On the other hand, the mining sector contracted by 1.6 percent, partly due to adjustments to the Work Plan and Budget (RKAB) and a decline in Freeport’s production. The manufacturing sector also grew more slowly than the national economy, although several of its sub-sectors still recorded positive performance. Thus, the growth structure in Q2 2026 shows the increasing importance of the services sector, trade, and domestic consumption in supporting national economic activity.