Without Electricity Discount and Inflation Rising, Airlangga Still Confident the Economy Will Grow 5.5 Percent

JAKARTA - Coordinating Minister for Economic Affairs Airlangga Hartarto is optimistic that the national economic growth target of 5.5 percent in the first quarter of 2026 can be achieved, driven by increased community consumption during Ramadan and Lebaran.

"It looks like the target of 5.5 can be achieved from the momentum during Ramadan yesterday," said Airlangga.

after performing the Eid al-Fitr prayer in Jakarta, Saturday, March 21.

He also highlighted the dynamics of inflation which is estimated to be higher than the same period last year. One of the reasons is the absence of the 50 percent electricity tariff discount program which previously applied in January-February 2025.

According to Airlangga, without the cut, people's spending on electricity would return to normal levels so that statistically, inflation would be higher.

"Last year until February there was a discount on electricity tariffs. That is what made inflation in terms of electricity experience deflation. This year because there is none, the figure will be higher," he said.

However, the government remains optimistic that people's purchasing power will be maintained, as consumption increases during Ramadan and Eid al-Fitr, which are the main drivers of economic growth.

The government targets economic growth in the first quarter of 2026 to be in the range of 5.5 percent to 5.6 percent on an annual basis (year-on-year/yoy). This target is supported by an acceleration in state spending, fiscal stimulus, and strengthening people's purchasing power.

To maintain this momentum, the government has prepared various economic stimuli at the beginning of 2026. Among them are Lebaran homecoming transportation incentives in the form of a 30 percent discount on train tickets, 30 percent marine transportation, 100 percent crossing services, and a 17-18 percent discount on air tickets.

The total budget for transportation incentives is estimated to reach IDR 911.16 billion sourced from the State Budget and non-State Budget.

In addition, the government also distributed food assistance worth Rp. 12 trillion to 35.04 million beneficiary families. The assistance is in the form of 10 kilograms of rice and 2 liters of cooking oil for the period February to March 2026.

The government has also allocated a budget of Rp. 55 trillion for the Eid allowance (THR) for around 10.5 million state apparatus, which includes state civil servants (ASN), government employees with work agreements (PPPK), TNI, Polri, and retirees.