NEW DELHI, November 6: Indonesia’s economy grew 5.47% year on year in the July–September quarter, up from 5.29% in the previous quarter, Bank Indonesia said on Thursday, citing official data. The central bank expects full-year growth for 2026 in a range of 4.9% to 5.7%, helped by government stimulus and stronger confidence.
Key highlights
- Q3 growth: 5.47% year on year, up from 5.29% in the second quarter.
- Household spending: up 5.04%, helped by greater mobility and concerts and sports events.
- Government spending: up 8.95%, driven by civil servants’ pay and spending on goods and services, including the Free Nutritious Meals (MBG) programme.
- Investment: up 6.06%; exports: up 4.59%.
- Outlook: Bank Indonesia sees 2026 growth of 4.9% to 5.7%.
| Component | Growth in Q3 2026 (year on year) |
|---|---|
| GDP | 5.47% |
| Household consumption | 5.04% |
| Government consumption | 8.95% |
| Non-profit institutions serving households | 5.02% |
| Investment | 6.06% |
| Exports | 4.59% |
Where the growth came from
Bank Indonesia said every sector of the economy grew. Manufacturing and trade, the biggest contributors, rose on both domestic and foreign demand. Hotels and restaurants grew with higher hotel occupancy and spending on food and drink, and construction was supported by government and private infrastructure projects. By region, growth was highest in Bali and Nusa Tenggara, followed by Java, Sulawesi, Sumatra, Maluku and Papua, and Kalimantan.
Our calculation
- Growth picked up by 0.18 percentage points from the second quarter.
- Government consumption (8.95%) grew faster than any other spending component, showing how much the state budget is supporting growth.
What it means for India and Asia
Indonesia, South-East Asia’s largest economy, is growing at about 5.5% even as many economies slow and energy costs rise. Its growth is driven mostly by home demand and government spending, not exports. For India, Indonesia is a key supplier of coal and palm oil and a growing market for Indian goods, so steady Indonesian demand supports that trade.
What to watch
- Bank Indonesia’s next policy decision and its view on the rupiah.
- Fourth-quarter spending on government programmes such as free meals.
The Sudirman Central Business District in Jakarta. Image: Muhammad Rasyid Prabowo, CC BY-SA 2.0, via Wikimedia Commons. Photo source · Licence
Sources
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