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Indonesia's Economic Growth Slows in Q2 Amid Strong Household and Government Spending

Indonesia's economic growth slowed in the second quarter but remained above expectations due to robust household and government spending.

By Staff Correspondent
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Indonesia's economic growth slows in second quarter | Business
BSS

Indonesia's economy expanded by 5.3% in the second quarter of 2026, down from 5.6% in the previous quarter. Despite the slowdown, this growth exceeded the 5.1% forecast by Bloomberg economists. The deceleration was attributed to strong household and government spending, which helped maintain the economy's momentum.

Economic Performance in Q2

Household consumption, accounting for over half of Indonesia's GDP, increased by 5.1%. Government expenditure also rose significantly by nearly 16%. These factors contributed to the economy's overall performance, despite the slight slowdown.

President Prabowo Subianto's administration aims for an ambitious economic growth target of 8% by 2029. While some experts question the feasibility of this goal, Finance Minister Purbaya Yudhi Sadewa assured that the government will implement various fiscal and monetary policies to support economic growth for the remainder of the year.

Source: BSS

FAQ

What was the GDP growth rate in Indonesia's Q2 2026?
Indonesia's GDP grew by 5.3% in the second quarter of 2026.
How did household spending contribute to the economy in Q2 2026?
Household spending, which accounts for over half of GDP, increased by 5.1% in Q2 2026, driven by holiday and religious holiday spending.
What is the government's economic growth target by 2029?
The government aims for an economic growth target of 8% by 2029.
What measures is the government planning to implement to support economic growth?
The government plans to stimulate the economy through various fiscal and monetary policies to ensure it grows at its full potential.

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