Indonesian Economy Grows 5.61% in Q1 2026

Jakarta: The Central Statistics Agency (BPS) reported that the Indonesian Economy grew 5.61 percent year-on-year (yoy) in the first quarter of 2026, surpassing the 4.87 percent recorded in the same period last year. This demonstrates that, amidst global geopolitical dynamics, the Indonesian Economy remains resilient and has recorded solid growth.

BPS Head Amalia Adininggar Widyasanti stated that private consumption remained the main driver of economic growth in the first quarter of 2026.

"The Indonesian economy grew 5.61 percent (yoy) in the first quarter of 2026, driven in part by maintained private consumption," Amalia stated at a press conference in Jakarta on Tuesday, May 5, 2026.

Amalia further explained that household consumption was the largest contributor to growth, at 2.94 percent. Household consumption performance in the first quarter of 2026 was primarily driven by population mobility during national holidays and religious holidays.

Various government policies to control inflation, as well as various government stimuli to encourage consumption, such as transportation ticket discounts, the provision of holiday allowances or 14th month salary, and the setting of the BI rate at 4.75 percent, provided additional impetus for soaring national economic growth in the first three months of this year.

"The number of domestic tourist trips grew by 13.14 percent (yoy) in the first quarter of 2026, followed by an increase in passenger numbers across several modes of transportation, including land transportation, ASDP (Indonesian Domestic Travel Agency), air transportation, and sea transportation," explained Amalia. She continued, noting that passenger growth in land transportation reached 20.20 percent (yoy) in the first quarter of 2026.

In addition to household consumption, another component driving economic growth in the first quarter of 2026 from the expenditure side was Gross Fixed Capital Formation (PMTB), which grew solidly by 5.96 percent. This figure was driven by government investment, including development aligned with national priorities, and by private investment.

Meanwhile, government consumption grew impressively by 21.81 percent, driven by increased employee spending on the 14th-month salary (THR) and on goods and services, particularly through the Free Nutritious Meals (MBG) program for the public.

The manufacturing industry is the main driver of GDP growth.

In terms of business sectors, Statistics Indonesia (BPS) recorded five main sectors that contributed significantly to total GDP in the first quarter of 2026: manufacturing (19.07 percent), trade (13.28 percent), agriculture (12.67 percent), construction (9.81 percent), and mining (8.69 percent).

Several sectors also recorded high growth, such as investment and food and beverage, which grew by 13.14 percent, driven by the MBG program and national holidays. Other services grew by 9.91 percent, driven by increased domestic and international tourist travel, and the transportation and warehousing sector grew by 8.04 percent in line with increased public mobility.

Furthermore, Statistics Indonesia (BPS) recorded that the manufacturing industry sector grew by 5.04 percent in the first quarter of 2026 (yoy). This sector's performance was primarily driven by the food and beverage, metal goods, computers, electronics, optical and electrical equipment, chemical, pharmaceutical, and traditional medicine industries.

"The growth of the manufacturing industry sector was primarily supported by increasing demand, both domestically and internationally," Amalia added.

The wholesale and retail trade, and car and motorcycle repair sectors grew by 6.26 percent in the first quarter of 2026 (yoy) in line with increased domestic production and imports. Increased agricultural production and industrial processing activities, imports of consumer goods, capital goods, and raw materials, and private spending drove this growth.

Meanwhile, the construction sector recorded solid growth of 5.49 percent in the first quarter of 2026 (yoy), driven by increased construction activity by both the government and the private sector. Meanwhile, the agricultural sector grew steadily at 4.97 percent in the first quarter of 2026 (yoy).

Regionally, in the first quarter of 2026, Java, Bali, Nusa Tenggara, and Sulawesi grew faster than the national Economy. The highest growth occurred in Bali and Nusa Tenggara at 7.93 percent, followed by Sulawesi at 6.95 percent, and Java at 5.79 percent (yoy).