Indonesia’s Q2 growth slows to 5.29%, BI keeps 2026 outlook

Jakarta — Indonesia’s economy grew 5.29% year on year in the second quarter of 2026, easing from 5.61% in the first quarter, according to Bank Indonesia and Statistics Indonesia. Bank Indonesia kept its 2026 growth outlook at 4.9% to 5.7% after its August policy meeting.

Bank Indonesia said the second-quarter result was mainly supported by fiscal stimulus, which lifted government consumption and investment. In its August monetary policy review, the central bank said the economy remained resilient and that growth momentum still needed support.

The policy review said domestic demand continued to underpin the outlook, alongside government and central bank measures aimed at sustaining economic expansion. Bank Indonesia also retained its benchmark BI-Rate at 5.75% at the 18-19 August meeting.

The central bank’s latest assessment came after Statistics Indonesia said on Aug. 5 that gross domestic product expanded 5.29% in April-June from a year earlier. The first-quarter figure was 5.61%, making the second quarter the slowest pace in three quarters, according to Reuters.

Bank Indonesia’s full-year forecast implies growth should stay above 4.9% but below 5.7% for 2026. The bank said the outlook was supported by domestic demand and policies from the government and central bank.

For businesses and investors, the data point to continued expansion in Southeast Asia’s largest economy, although the quarterly slowdown suggests momentum has softened from the start of the year. The figures also reinforce the importance of fiscal support and domestic demand as global volatility persists.

Reuters reported that the second-quarter reading was above market expectations, while local media RRI also reported the same 5.29% figure and the 5.61% first-quarter comparison.

Sources

• Reuters
• Bank Indonesia
• RRI.co.id