Indonesia economy grows 5.29% in Q2 2026

Indonesia's economy grew by 5.29 percent year-on-year in the second quarter of 2026, according to data from the Central Bureau of Statistics (BPS). This growth reflects a shift in economic drivers, as investment—measured by Gross Fixed Capital Formation (PMTB)—accelerated to 6.87 percent, up from 5.96 percent in the previous quarter.

While investment is gaining momentum, household consumption remains a primary driver, though it experienced a seasonal normalization following the Ramadan and Lebaran periods, growing at 5.06 percent. Analysts from Permata Bank and Bank Danamon note that while consumption is resilient due to government energy subsidies and inflation control, the economy faces potential moderation in the second half of 2026 due to tighter monetary conditions and external pressures.

Economic experts highlight that the strengthening of the investment sector, including public infrastructure projects and private sector interest in digital and manufacturing industries, provides a more balanced growth structure. However, concerns remain regarding the rising non-performing loan (NPL) rates among small and medium-sized households, signaling a need to strengthen the purchasing power of the aspiring middle class.