When Growth Returns to the Regions: 6% is Not a Mirage

There was a time when economic growth felt like a figure far removed from daily life. It was born in statistical rooms, debated in seminars, moved across the screens of economists, and occasionally appeared in state speeches. 5%, 6%, 8%—these numbers sounded cold.

Yet, behind every single percentage of growth, there is a far more human story. There are stalls that become busy again, factories opening doors for new workers, roads that shorten a farmer’s journey to the market, schools renovated by local contractors, or a family that, for the first time in a long while, begins to dare to make plans for tomorrow.

Therefore, when some economists doubt the 6% growth target for 2027 announced by President Prabowo Subianto, I believe the debate should not stop at the simple question: possible or impossible?

The far more important question is where that growth will come from, who will drive it, and to whom the final results will return?

READING THE DATA

BPS (Statistics Indonesia) data provides some answers. In the first quarter of 202/25, only four provinces were able to grow by 6% or more. A year later, that number rose to eight provinces. Looking at the first semester, the number of provinces growing by at least 6% increased from four in 2025 to seven in 2026.

However, a more interesting story emerges when we look deeper into the regency and city levels. In the first quarter of 2024, there were 80 regencies/cities growing at 6% or more. A year later, this number reached 101. By the first quarter of 2026, that number increased again to 118 regions. In two years, the number of regencies/cities capable of breaking through 6% growth increased by approximately 47.5%.

Furthermore, 358 out of 514 regencies/cities—nearly 70%—recorded higher economic growth in the first quarter of 2026 compared to the first quarter of 2024.

Of course, these figures do not mean that the issue of equality has been resolved. Regional growth is not automatically identical to income equality, let alone welfare equality. However, it provides a signal that is difficult to ignore: economic acceleration is beginning to appear in more points across the Indonesian map.

Gorontalo, for example, moved from 4.37% growth in the first quarter of 2024 to 6.08% in 2025 and then 7.68% in 2026. Riau Islands increased from 5% to 5.16% and then 7.04%. South Sulawesi moved from 4.82% to 5.79% and then 6.88%. West Kalimantan moved from 4.98% to 5%, then 6.14%.

At the regency/city level, some accelerations were even sharper. East Halmahera grew from 5.64% to 26.25% and then 32.87%. Rote Ndao moved from 2.71% to 6.19% and 15.68%. Sinjai reached 11.14%, Pohuwato 10.48%, Gowa 9.05%, while Mempawah and Kendal reached 8.25% and 7.86% respectively.

THE GROWTH ENGINE

Naturally, extreme growth in certain regions must be read with caution. A relatively small economic base, the arrival of new investment, downstreaming, or large-scale projects can produce surges that may not necessarily repeat every year.

However, therein lies the lesson: Indonesia does not actually lack growth engines. Perhaps for too long, we have been looking for them in the same places.

This conclusion did not come to me suddenly. A few years ago, my team and I prepared a Technical Paper on Target Setting for RPJMN 2025–2029 within the framework of the Indonesia-Australia Partnership for Infrastructure, or KIAT. One important approach used was inter-regional input-output. The reason is simple: Indonesia is not a homogenous economic space. Sumatra is not the same as Java. Java is not the same as Kalimantan. Sulawesi has its own economic structure, as do Maluku, Papua, and Bali-Nusa Tenggara.

In that study, a high-growth scenario even modelled that the Indonesian economy could reach approximately 8.2% by 2029, provided there is adequate, targeted, and increasingly efficient infrastructure investment. Crucially, the study emphasised the need for a well-distributed investment strategy to drive growth while reducing inter-regional disparities.

The message is simple: not all regions must grow using the same recipe. Java has strengths in connectivity, industry, services, and the digital economy. Kalimantan has great potential in downstreaming and energy. Sulawesi has an evolving commodity chain and processing industry. Meanwhile, Bali-Nusa Tenggara, Maluku, and Papua require acceleration in connectivity, digitalisation, clean water, and basic services. The study also showed that investment more oriented towards sectors with high multipliers can provide more efficient economic impacts compared to merely repeating past investment allocation patterns. Even for lagging regions, investment needs are not always the same as for mature regions: ICT, clean water, sanitation, and connectivity can play a far more decisive role.

ACHIEVING GROWTH

I subsequently took these findings further in research regarding integrative economic modelling to achieve 8% economic growth, which I also tested and discussed at Cambridge University with several scholars. In that research, I attempted to bring together several dimensions that too often run in isolation in economic discussions: financial risk, sectoral and regional multipliers, investment needs, and the distribution of welfare.

One interesting result is that the heterogeneity of multipliers between regions is highly significant. An optimal combination of sectors and locations has the potential to increase…