JAKARTA — Indonesia’s economy grew 5.6 percent in the first three months of 2026.
The country is staying strong despite global problems, according to Said Abdullah, head of the National Budget Agency at Indonesia’s house of Representatives.
Abdullah made the announcement to address a shrinking state budget, a possible deficit over 3 percent by the end of the year and the rupiah’s drop against the dollar.
“I consider it a form of concern and care. We would be more worried if there was apathy and reluctance to speak up. That is exactly what we do not want to see,” he stated.
Seasonal Factors and Government Spending Drive Growth
Abdullah credited the strong performance was partly due to seasonal factors, including Ramadhan and Eid al-Fitr, which increased household spendings.
This stimulated activity in industry, trade, transportation, hotels, and restaurants.
Government spending also played an important role, growing 21.81 percent year-on-year in the first quarter and contributing 1.26 percent to overall economic expansion.
“Government spending, which usually only accelerates in the second quarter, moved faster this time. This strategy deserves appreciation,” Abdullah emphasized.
Strong Budget Performance and Positive Indicators
The strong growth was matched by a healthy state budget.
State revenue hit Rp 574.9 trillion (about $37.6 billion), up 10.5 percent from last year, helped by a 20.7 percent jump in tax revenue.
Abdullah noted the government still holds a tax overpayment surplus of Rp 13.38 trillion (approx. USD 875 million).
Other key indicators showed strength: Indonesia’s trade balance has remained positive for 71 consecutive months, with a USD 5.5 billion surplus, while bank credit growth stayed positive.
Although non-tax revenue faces challenges from lower oil and gas lifting and prices, Abdullah expressed optimism for a second-quarter recovery as crude prices rise and upstream operations revive.
Source: kompas.com
Feat Image: rri.co.id
