Indonesia Q2 GDP Annual Growth Beats Forecasts

Indonesia’s economy grew 5.29% yoy in Q2 2026, exceeding market expectations of 5.1%, though it marked the slowest annual expansion since Q3 2025. The latest reading followed a 5.61% gain in Q1, which had been the strongest yearly growth since Q3 2022. Both private consumption (5.06% vs 5.52% in Q1) and government spending (15.97% vs 21.81%) rose at a softer pace. Meanwhile, fixed investment accelerated (6.87% vs. 5.96%). On the trade front, imports (8.82% vs 6.43%) rose much faster than exports (4.13% vs 0.90%), reflecting resilient domestic demand alongside improving external trade. By sector, activity eased in manufacturing (4.52% vs 5.04% in Q1), communication (6.97% vs 7.14%), accommodation and food services (10.6% vs 13.14%), and transportation and warehousing (5.65% vs 8.04%). For H1 of the year, the economy grew 5.45% from the same period in 2025. The country's GDP expanded 5.11% last year, below the official 5.2% target, with a projected 5.4% this year.

Indonesia’s GDP expanded 5.61% year-on-year in Q1 2026, accelerating from 5.39% in Q4 and exceeding market expectations of 5.3%. It marked the fastest yearly growth since Q3 2022, boosted by an acceleration in private consumption (5.52% vs 5.11%), amid support measures to boost spending during the festive season. Government expenditure picked up (21.81% vs 4.55%), while fixed investment stayed robust (5.96% vs 6.12%). On the trade front, exports slowed sharply (0.90% vs 3.25%), reflecting growing supply chain disruptions linked to the geopolitical tensions, while imports surged (7.18% vs 3.96%) on solid domestic demand. By sector, activity strengthened in wholesale/retail trade (6.26% vs 6.07%), construction (5.49% vs 3.89%), and accommodation and food services (13.14% vs 7.15%), but eased in manufacturing (5.04% vs 5.40%) and information and communication (7.14% vs 8.09%). The economy expanded 5.11% in 2025, below the government’s 5.2% target, with growth projected at 5.4% this year.

Indonesia’s GDP advanced 5.39% yoy in Q4 2025, accelerating from 5.04% in Q3 and surpassing market expectations of 5.01%. It was the strongest yearly growth since Q3 2022, boosted by solid private consumption (5.11% vs 4.89% in Q3) on continued government support measures and lower borrowing costs, even as government spending slowed (4.55% vs 5.66%). Also, fixed investment gained traction (6.12% vs 5.04%). However, net trade was less supportive, with export growth sharply easing (3.25% vs 9.14%) while imports picked up (3.96% vs 0.86%). By sector, output quickened in agriculture, forestry and fishing (5.14% vs 4.93%), wholesale/retail trade (6.07% vs 5.46%), transport and warehousing (8.98% vs 8.62%), and finance and insurance (7.92% vs 0.77%). For the full year, GDP rose 5.11%, below the government’s 5.2% target, reflecting the impact of natural disasters in three provinces, though still the strongest annual growth in three years. For 2026, the economy is expected to grow by 5.4%.