Indonesia’s economic growth slows in second quarter

Indonesia's economic growth decelerated slightly in the second quarter of the year, according to data released by the country's statistics agency on Wednesday. Despite this slowdown, the growth figure still surpassed market expectations, largely due to robust household and government spending. Southeast Asia's largest economy experienced a 5.3% expansion between April and June, as opposed to the 5.6% growth observed in the preceding quarter.

This figure was, however, an improvement on the 5.1% growth that economists surveyed had anticipated.

Household expenditure, which constitutes more than half of the nation's gross domestic product, witnessed a 5.1% increase, as reported by Moh Edy Mahmud, an official from Statistics Indonesia. The surge in household spending was primarily attributed to heightened activity during holiday and religious festivities. Government expenditure also saw a substantial rise of nearly 16% during the same period.

President Prabowo Subianto's administration has set an ambitious growth target of eight percent by 2029, which is one of its primary policy objectives. However, some experts have cautioned that achieving this goal could prove to be a challenging endeavor. Finance Minister Purbaya Yudhi Sadewa announced on Monday that the government intends to stimulate the economy throughout the remainder of the year, potentially resulting in around six percent growth during the second half of 2026.

In a televised address, Sadewa pledged his commitment to implementing various fiscal, monetary, and other policies to ensure that the domestic economy can reach its full potential.