[REVISION HISTORY]

Indonesia economic growth 2026

Updated 5 times since CLSTR started tracking revisions of this situation.

What changed

2026-08-03 04:12 UTC → 2026-08-03 09:33 UTC · added ~~removed~~

Indonesia’s GDP ~~expanded~~ grew 5.61% year‑on‑year in Q1 2026, ~~buoyed by strong domestic consumption, rising investment and a~~ outpacing ASEAN averages. The Rp26.34 trillion stimulus package ~~that funds~~ funded food aid, apprenticeships and licensing reforms. Agricultural output remained resilient, with corn production up nearly 20%. Economists project Q2 growth to stay above 5%, forecasting around 5.18% as government spending on strategic projects, household consumption aid for 33 million families, soybean support for tofu producers and ~~a 7.1% rise in investment—including~~ transport discounts, while a ~~27.5% jump~~ $0.09 billion trade surplus was recorded in ~~foreign direct investment—continue to underpin~~ April. Manufacturing PMI held at 50, signalling modest expansion, and the ~~outlook, while export growth is expected to slow. The July~~ Industrial Confidence Index rose to 53.10, reflecting modest optimism as 22 of 23 manufacturing subsectors expanded, though analysts note the rise may be technical and the manufacturing PMI remains in contraction. Government programmes such as free nutritious meals, 53.10. Deputy Chairman Eddy Soeparno linked the ~~B50 biodiesel mandate and village‑cooperative projects support demand for processed food, palm‑oil~~ government’s 8% growth ambition to energy‑security and ~~construction materials. Inflation expectations are being refined.~~ low‑carbon investments; Bank ~~Permata projects headline inflation to average about 3.13% for~~ Indonesia governor Perry Warjiyo projected 2026 growth between 4.9% and ~~expects the policy rate~~ 5.7%. Domestic consumption remained strong, but food‑price dynamics shifted. In August, lower‑grade rice rose to ~~stay at 5.75% unless price pressures intensify. External risks include Middle‑East tensions~~ 15,150 rupiah/kg and ~~possible U.S. Federal Reserve hikes. The statistics agency will release~~ red onion to 41,900 rupiah/kg, while chicken meat fell to 37,700 rupiah/kg. Analysts expect July ~~CPI on 3 August. Bank Mandiri forecasts month‑to‑month CPI~~ inflation to slow to 0.03% ~~from 0.44% in June,~~ month‑on‑month, with annual CPI around 3.06%. July 2026 CPI showed a 0.14% month‑to‑month deflation, bringing year‑on‑year inflation to 2.88%. The decline was driven by food, beverage and tobacco items, notably onion and red chili. Bank Mandiri projected core inflation at ~~3.06%~~ 0.29% and confirmed the 0.03% month‑on‑month outlook. Trade data revealed a ~~1.12% deflation in volatile food items such as red‑chili and onion,~~ June deficit of US$0.45 billion, with oil imports up 105% YoY, while administered prices rise 0.10%. A regional spike in Central Java (0.44% month‑to‑month) linked to higher red‑chili, onion, rice, cigarettes and gasoline prices, amid drought warnings, highlights localized pressures. Danamon warns that food‑price inflation above 5% could cut household purchasing power the January‑June half‑year surplus reached US$3.58 billion, supported by a non‑oil surplus of US$19.35 billion. Agricultural output grew, with June paddy area up ~~to 70%~~ 6.9% YoY and ~~raise non‑performing loans, potentially slowing~~ production rising 7.0%; a slight decline is forecast for the ~~investment‑driven growth trajectory.~~ July‑September harvest. Inflation expectations are being refined, and external risks such as Middle‑East tensions and possible U.S. Federal Reserve hikes persist.

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