JAKARTA – Indonesia’s economic growth remained resilient in the second quarter of 2026, supported by government stimulus and sustained confidence among economic actors, despite a weak global outlook and continued financial market uncertainty.
Acting Bank Indonesia Governor Destry Damayanti said economic growth is expected to remain solid, supported by government stimulus programs and stable domestic confidence.
“Going forward, growth is expected to remain strong, supported by government stimulus programs and sustained confidence among economic actors,” Destry said at a press conference following the Bank Indonesia Board of Governors’ Meeting in Jakarta on Wednesday.
Indonesia’s economy grew 5.29 percent year-on-year (yoy) in the second quarter of 2026, following growth of 5.61 percent in the previous quarter.
Destry said the growth was primarily supported by fiscal stimulus, which boosted government consumption and investment.
Government spending was driven by operational expenditures, including the 13th-month salary payment for civil servants, as well as the procurement of goods and services for the government’s Free Nutritious Meals (MBG) program.
Household consumption and exports also remained stable. However, Bank Indonesia stressed that both sectors need continued support to strengthen the country’s economic structure and maintain sustainable growth.
For the full year of 2026, Bank Indonesia projects Indonesia’s economic growth to remain within the range of 4.9 percent to 5.7 percent.
Global Risks Remain a Concern
Indonesia’s relatively strong domestic performance comes amid a challenging global economic environment.
Bank Indonesia expects global economic growth to remain around 3 percent in 2026, weighed down by ongoing conflicts in the Middle East, rising commodity prices, and persistent global inflation, which is projected to remain around 4.5 percent.
“Global economic growth in 2026 will not be strong,” Destry said, pointing to continued tight monetary conditions in major economies.
The US Federal Reserve is expected to raise the federal funds rate in the fourth quarter of 2026. Such a move could keep US Treasury yields elevated and strengthen the US dollar index (DXY).
These external pressures have constrained capital flows into emerging markets, including Indonesia.
In response, Bank Indonesia said it would continue implementing targeted adjustments to monetary, macroprudential, and payment-system policies.
The measures are aimed at maintaining external resilience while supporting domestic economic expansion and preserving the momentum of Indonesia’s economic growth.
Daffa Ibrahim/Afdilah
