Business Sector: 5.29% Economic Growth Not Yet Solid

Indonesia's economic growth reached 5.29% in the second quarter of 2026, a figure that the business community acknowledges as positive but considers relatively fragile. Industry leaders stress the need for more massive and strategic efforts to ensure this growth is sustained and amplified throughout the year.

Shinta Kamdani, Chairwoman of the Indonesian Employers Association (Apindo), noted that the second quarter was particularly challenging for the real sector. Businesses grappled with cost-push inflation, driven by rising energy prices stemming from the conflict in the Strait of Hormuz and the impact of a weaker exchange rate on production costs and imported raw materials.

Furthermore, export demand from key trading partners weakened in April and May due to geopolitical factors affecting purchasing power. The domestic market also saw a slowdown in demand, partly influenced by fuel price increases. These combined pressures made business expansion difficult during the second quarter.

Despite these challenges, Kamdani acknowledged that some industries did expand, though this was not a dominant trend. She pointed to the S&P Manufacturing PMI for July, which showed a modest improvement (50.2), indicating that the economic growth experienced is new and requires careful nurturing to become more solid and exponential. Without continued strategic support, industries may remain defensive or under pressure.