Coordinating Minister for Economic Affairs Airlangga Hartarto Confident Economy Grew 5.5% in Q1 2026

JAKARTA, Jakartaweekly.com — Despite ongoing global uncertainty, the Indonesian government remains confident that the country’s economy grew by around 5.5% in the first quarter of 2026, with household consumption serving as the main driver.

The projection was conveyed by Coordinating Minister for Economic Affairs Airlangga Hartarto during a press conference on the realization of first-quarter investment in Jakarta on Thursday, April 23, 2026.

“Growth in the first quarter is fundamentally quite solid, and barring any changes, the figure is estimated to be at or above 5.5%,” he said.

He noted that household consumption, the disbursement of holiday allowances (THR), accelerated government spending, and an economic stimulus package worth Rp809 trillion have underpinned economic performance at the start of 2026.

However, he added that the official first-quarter growth figure will only be confirmed once released by Badan Pusat Statistik.

Entering the second quarter, the government is preparing additional growth drivers, including the disbursement of the 13th-month salary in June and the continuation of social protection programs.

Investment is also expected to remain one of the key engines sustaining economic expansion. On the monetary front, Bank Indonesia has maintained its benchmark interest rate (BI rate) at 4.75%, a move seen as supportive of economic stability.

Several macroeconomic indicators also point to the resilience of the domestic economy. Manufacturing activity remains in expansion territory, with an index above 50, while the trade balance has recorded a surplus for 70 consecutive months.

Foreign exchange reserves stood at US$148.2 billion, and the state budget deficit remained low at 0.93% of GDP.

Airlangga also highlighted Indonesia’s resilience in the energy and food sectors. Diversification of domestic energy sources—including gas, coal, and hydro—has limited reliance on global energy routes such as the Strait of Hormuz to around 20%.

Meanwhile, stable fertilizer supply has supported food sector stability and even opened up export opportunities to several countries.

To further accelerate growth, the government is pushing structural reforms through regulatory simplification and faster investment processes, including the establishment of a task force to address investment bottlenecks.

In addition, updates to business classification standards through new regulations issued by the statistics agency have accommodated emerging sectors such as the digital economy, artificial intelligence (AI), and crypto assets.

The government is targeting investment realization to exceed Rp2,000 trillion this year as a key growth lever. Overall, Indonesia aims to achieve economic growth of at least 5.4% in 2026, despite persistent global uncertainties.

“This is a step that must be consistently maintained together, as it serves as a key driver of our economy,” Airlangga said.

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