Indonesia Q2 GDP Grows 3.73% QoQ, Strongest Pace in a Year

Indonesia’s economy expanded 3.73% quarter-on-quarter in Q2 2026, reversing a 0.77% contraction in the previous period and marking its strongest quarterly growth since Q2 2025. The latest reading also exceeded market expectations for a 3.5% increase, driven by a sharp acceleration in private consumption (2.69% vs 1.01% in Q1) amid the 13th-month wage bonus. Government expenditure rebounded strongly (15.08% vs -30.13%), due to faster implementation of fiscal support measures. Also, fixed investment recovered, up 5.0% after a 7.54% drop in Q1. Net trade contributed positively, though export growth (8.45%) lagged behind the stronger increase in imports (12.39%). By sector, output bounced back for mining (1.57% vs -8.20%), manufacturing (0.88% vs -1.01%), construction (2.12% vs -4.47%), and transport (4.21% vs -1.49%). Activity also quickened for agriculture (12.26% vs 9.56%), wholesale/retail trade (3.26% vs 0.13%), communication (2.71% vs 1.09%), and real estate (1.08% vs 0.17%).

Indonesia’s economy contracted 0.77% qoq in Q1 2026, marking its first quarterly GDP decline in a year and coming in less severe than market estimates of a 0.97% drop. The pullback followed a 0.86% growth in Q4, weighed by a sharp reversal in government spending (-30.13% vs 37.68% in Q4) and a fall in fixed investment (-7.54% vs 3.5%). Both exports (-9.15% vs -1.18%) and imports (-8.12% vs 6.62%) slipped, reflecting global and domestic headwinds, including tensions in the Middle East and a softer rupiah. Private consumption growth eased (1.01% vs 1.84%), despite festive demand. By sector, output shrank in mining (-8.20% vs 3.96%), manufacturing (-1.01% vs 0.55%), construction (-4.47% vs 3.88%), and transport (-1.49% vs 1.81%). Growth eased in wholesale/retail trade (0.13% vs 0.68%), financial services (1.38% vs 6.13%), and public administration (13.04% vs 13.59%). Agriculture rebounded (9.56% vs -18.33%), and accommodation gained traction (3.91% vs 1.57%).

Indonesia’s economy grew 0.86% qoq in Q4 2025, beating market estimates of 0.68% but easing from a revised 1.42% in Q3. It marked a third straight quarter of growth, though the mildest in the sequence amid lingering disruptions from November's natural disasters in Sumatra. Fixed investment slowed (3.5% vs 6.37% in Q3), and net trade dragged as exports fell (-1.18% vs 6.95%), but imports rose (6.62% vs -0.45%). Private consumption recovered (1.84% vs -0.55%), helped by lower borrowing costs and government stimulus, including cash handouts, while government spending surged (37.68% vs 4.76%). By sector, output eased in manufacturing (0.55% vs 4.09%), construction (3.88% vs 5.28%), and wholesale/retail trade (0.68% vs 2.21%), while agriculture plunged (-18.33% vs 3.33%). In contrast, mining (3.96% vs 1.47%), transport (1.81% vs 1.08%), and accommodation (1.57% vs 0.73%) accelerated, with financial services (6.13% vs -4.13%) and public administration (13.59% vs -17.21%) rebounding sharply.