Indonesia's Economy Grows 5.29% in Second Quarter
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Indonesia: Indonesia's economy expanded by 5.29% year-on-year in the second quarter of 2026, according to Statistics Indonesia, exceeding the 5.1% median forecast in a Reuters survey despite slowing from 5.61% growth recorded in the first quarter. Household and government spending eased compared with the previous quarter, although government expenditure increased by 15.97% year-on-year, supported by spending on civil servants and fuel subsidies introduced to offset higher energy costs linked to the Iran conflict. The government continues to target economic growth of 5.4% in 2026, with Finance Minister Purbaya Yudhi Sadewa aiming for growth of up to 6% this year.
The data comes as investors continue to monitor concerns over government spending, the potential review of Indonesia's equity market status by MSCI, and developments following the resignation of Bank Indonesia Governor Perry Warjiyo. The Indonesian rupiah remains near record lows against the US dollar, while the country's stock market has declined by nearly 30% this year. "Not strong enough yet," said Finance Minister Purbaya Yudhi Sadewa, referring to the second-quarter growth figure, adding that the government aimed to accelerate economic expansion.
Source: Reuters