Indonesian Economy in the Second Quarter of 2026 Grows 5.29 Percent Supported by Household Consumption

JAKARTA - The Central Statistics Agency (BPS) reported that Indonesia's economy in the second quarter of 2026 grew 5.29 percent year on year (yoy) mainly supported by increased household consumption due to high community shopping activity during the holiday season and religious holidays.

In addition to household consumption, economic performance is also supported by increased investment and acceleration of government spending throughout April to June 2026.

Quarter to quarter (quarter to quarter/qtq), Indonesia's economy grew 3.73 percent compared to the previous quarter. Meanwhile, cumulatively, economic growth in the first half of 2026 reached 5.45 percent.

Although it still recorded solid growth, the achievement of the second quarter of 2026 was lower than the first quarter of 2026 which grew 5.61 percent (yoy). However, this figure is higher than the same period last year which was 5.12 percent.

BPS Deputy for Balance and Statistical Analysis, M. Edy Mahmud, said household consumption remained the largest component in the formation of gross domestic product (GDP), namely in the second quarter of 2026, its contribution reached 53.32 percent of GDP with growth of 5.06 percent annually.

"The contribution to economic growth according to expenditure is the highest household consumption, with a contribution of 53.32 percent with a growth of 5.06 percent," he said in a press conference, Wednesday, August 5.

According to Edy, the increase in consumption is influenced by the high mobility of the community during holidays and religious holidays, so that this condition encourages an increase in spending in various sectors, especially restaurants and hotels which grew 6.47 percent and transportation and communications which increased 5.71 percent.

He revealed that the performance of these sectors became the main driver of household consumption which is still the engine of national economic growth.

In terms of spending, household consumption contributed the most to economic growth with a growth source of 2.67 percent.

Meanwhile, Gross Fixed Capital Formation (PMTB) or investment grew by 6.87 percent (yoy) with a contribution of 29.36 percent (yoy).

"Both are components with the largest contribution to economic growth in the second quarter of 2026 (consumption and PMTB) with a total contribution of 82.68 percent (yoy)," he said.

Furthermore, the component with the highest growth is government consumption which grew by 15.97 percent (yoy), but its contribution only reached 7.57 percent (yoy) to economic growth.

"This government consumption is driven by an increase in the realization of employee spending as well as goods and services spending in this quarter," he explained.

He added that if viewed from the source of economic growth in the second quarter of 2026, household consumption is still the highest source of growth at 2.67 percent.

In addition, the economic growth in the second quarter of 2026 was also supported by the PMTB component with a contribution of 2.06 percent and government consumption contributed 1.07 percent.

Edy explained that investment showed positive performance supported by an increase in vehicle purchases of 26.03 percent, production equipment of 16.18 percent, and the realization of investment in various economic regions of 7.14 percent.

Furthermore, government consumption also grew high by 15.97 percent with the increase triggered by the increase in the realization of employee spending, including the payment of the 13th salary for ASN, TNI, and Polri, as well as the acceleration of goods and services spending.

According to him, the increase in spending on goods distributed to the public through the Free Nutritious Meal (MBG) Program is also a factor driving government consumption growth.

"Government consumption also grew driven by an increase in the realization of goods and services spending, especially on goods spending that is handed over to the community, one of which is through the Free Nutritious Meal program," he said.

Nominally, Indonesia's GDP on the basis of prevailing prices (ADHB) in the second quarter of 2026 reached IDR 6,552 trillion. Meanwhile, the GDP on a constant price basis (ADHK) in 2020 was recorded at IDR 3,576 trillion.

From the regional perspective, all regions of Indonesia recorded positive economic growth, namely Java Island is still the largest contributor to the national GDP with a share of 56.47 percent, followed by Sumatra at 22.8 percent.

Meanwhile, Bali and Nusa Tenggara recorded the highest growth of 6.10 percent, followed by Java 5.65 percent and Sulawesi 5.53 percent.