Indonesia GDP growth slows to 5.3% in second quarter

Indonesia's economy grew 5.3 percent in April-June, official data released Wednesday showed, slowing from 5.6 percent in the previous quarter while household and government spending rose.

The second-quarter figure was above the 5.1 percent projected in a Bloomberg survey of economists.

Statistics Indonesia official Moh Edy Mahmud said household expenditure, which makes up more than half of gross domestic product, rose 5.1 percent. He said household consumption was supported by holiday and religious holiday spending. Government expenditure climbed nearly 16 percent.

President Prabowo Subianto's government is targeting 8 percent growth by 2029. Some experts have warned that target would be hard to reach.

Capital Economics expressed doubt about the official figures. Senior Asia economist Gareth Leather said growth was likely to struggle, arguing that higher central bank interest rates would weigh on consumption and investment.

Bank Danamon lead economist Irman Faiz said economic growth was expected to ease in the second half of 2026 as fiscal spending normalised from a high base. He projected 5.2 percent expansion in 2026.

Finance Minister Purbaya Yudhi Sadewa said Tuesday the government would stimulate the economy for the rest of the year as it seeks growth of about 6 percent in the second half of 2026.

“I will put everything on the market, every possible policy from the fiscal, monetary side to ensure that the domestic economy can grow at its full potential,” he said in a televised speech.