Indonesia's 5.29% economic growth doesn't reflect welfare quality, says INDEF

Indonesia's economy grew by 5.29% in the second quarter of 2026, a figure that the Institute for Development of Economics and Finance (INDEF) warns does not entirely translate to improved public welfare. Rizal Taufikurrahman, head of INDEF's Center of Macroeconomics and Finance, stressed that while the growth rate is relatively high, its quality remains questionable.

"The quality is not yet fully strong," Rizal stated, explaining that the reduction in unemployment and poverty does not automatically signify better living standards. He pointed to the nature of job creation, which is predominantly occurring in the informal sector.

This informal sector, according to INDEF, is characterized by low productivity, meager wages, and inadequate protection for workers. This means that even as the economy expands, a significant portion of the workforce may not be experiencing substantial improvements in their economic security or quality of life.

INDEF is urging the Indonesian government to look beyond the headline growth numbers and focus on the qualitative aspects of economic development. The institute advises against complacency, suggesting that a deeper analysis of the economic structure and its impact on the population's well-being is necessary to ensure that growth is inclusive and sustainable.