Indonesia sets 5.4 percent economic growth target for 2026: Minister

Jakarta (ANTARA) - Indonesian government is targeting economic growth of 5.4 percent for the full year of 2026, in line with the year-end economic growth target set in the 2026 State Budget.

"For the fourth quarter, the government is maintaining its year-to-date target of 5.4 percent. The target is roughly close to the achievement in the third quarter," Coordinating Minister for Economic Affairs Airlangga Hartarto said at a press conference on Thursday.

Earlier, Statistics Indonesia (BPS) reported that Indonesia's economy grew by 5.47 percent year-on-year (yoy) in the third quarter of 2026.

Gross Domestic Product (GDP) at constant prices (ADHK) was recorded at Rp3,633.2 trillion (US$201 billion), while GDP at current prices (ADHB) reached Rp6,741.0 trillion (US$372.9 billion).

On a quarter-to-quarter (qtq) basis, the Indonesian economy grew by 1.59 percent compared to the second quarter of 2026. The economy also recorded year-on-year growth of 5.45 percent.

Hartarto described Indonesia's economic growth in the third quarter of this year as solid, noting that it outpaced the growth recorded by G20 member countries.

He explained that Indonesia's economic growth surpassed China's, which recorded growth of 4.5 percent (yoy), South Korea's at 3.4 percent (yoy), Germany's at 1.2 percent (yoy), and Japan's at 0.7 percent (yoy).

Meanwhile, India's economy recorded higher growth at 7.8 percent (yoy).

The minister further explained that household consumption remained the main driver of economic growth, expanding by 5.04 percent (yoy).

In terms of expenditure, household consumption accounted for the largest share of national GDP, at 51.97 percent.

In terms of growth contributions, household consumption also made the largest contribution to national economic growth, accounting for 2.62 percentage points of the total 5.47 percent growth.

Gross fixed capital formation (PMTB), or investment, also supported economic growth, accounting for 30.81 percent of GDP and recording growth of 6.06 percent.

According to Hartarto, the positive performance of PMTB was also reflected in the 7.59 percent increase in realized investment reported by the Investment Coordinating Board (BKPM).

Meanwhile, government consumption grew by 8.95 percent, higher than the 5.66 percent recorded in the same quarter last year, and accounted for 7.28 percent of GDP.

The increase in government consumption was driven by higher personnel spending, particularly on civil servants' salaries and allowances, as well as greater expenditure on goods and services, including items distributed to the public through the Free Nutritious Meals (MBG) program.

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Translator: Bayu Saputra, Resinta Sulistiyandari
Editor: Primayanti
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