Purbaya admits that the Indonesian economy slowed down in the second quarter, this is the government's strategy

Minister of Finance Purbaya Yudhi Sadewa. (Photo: ANTARA)

JAKARTA - Finance Minister Purbaya Yudhi Sadewa admitted that Indonesia's economic growth in the second quarter of 2026 slowed down and would be in the range of 5.4 percent.

"If we look at the predictions of all four institutions, it seems to be below 5.6 percent for the second quarter, but not far from 5.4 percent either. So it's slowing down, but it's not too bad," he said at the Press Conference on the Results of the Regular Meeting of the Financial System Stability Committee (KSSK) III in 2026, Monday, August 3.

According to him, the economic slowdown in the second quarter of 2026 is inseparable from the increasing global uncertainty and this condition is reflected in the high world oil prices, increased capital outflow, and the government's steps in maintaining the stability and security of the state budget.

"Because in the second quarter we have peaks of uncertainty. Oil prices are high, the war is still unclear, we are still regulating how to keep our budget safe. A lot of capital is coming out and so on," he said.

Despite facing this pressure, Purbaya is optimistic that economic growth will strengthen again in the second half of 2026.

He added that the government would also strengthen coordination with Bank Indonesia to ensure adequate liquidity in the financial system so that various sources of growth could move optimally.

"But I am confident that for the second semester this growth should be better because we will coordinate closely with the central bank to ensure that all growth engines can run," he said.

Purbaya said that in addition to maintaining liquidity, the government has also prepared a number of policies to encourage economic activity, one of which is a stimulus package that will be announced in the near future, including plans to provide stimulus for electric vehicles, especially electric motorcycles.

"We will also provide some economic stimulus in the near future. If I'm not mistaken, the stimulus for electric cars and motorcycles will be announced. Later, the President (Prabowo Subianto) will announce it," he said.

He added that the government would also improve the investment climate and accelerate the realization of state spending in order to provide greater impetus to economic activity.

"Other steps to encourage the economy will ensure that we enter the economy, including ensuring that the liquidity in the financial system is sufficient later in coordination with the central bank. Also ensure that the investment climate is better than in previous years," he said.

Purbaya assessed that the acceleration of government spending in the second semester of 2026 would be one of the keys to encouraging economic recovery and increasing spending realization is expected to drive the activities of various sectors while strengthening consumption and investment.

"We will also ensure that government spending in the second semester is further than in the first semester, mainly in the second quarter, compared to the second quarter of this year," he said.

With this combination of policies, Purbaya is optimistic that Indonesia's economic growth in the second half of 2026 can increase again to a range of 5.6 percent to 6 percent.

"We predict that in the second semester the economy can grow and recover in a state of 5.6 percent to 6 percent with hard work of course," he concluded.