Indonesia's Economy Grows 5.61%, Global Investors Remain Cautious

Indonesia's economy demonstrated resilience, growing by 5.61% in the first quarter of 2026, signaling a robust national economic foundation amidst global uncertainties. The Institute for Development of Economics and Finance (Indef) views this growth as a positive sign, with hopes for continued expansion in the second quarter, supported by government fiscal stimulus.

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Hopefully, economic growth in the second quarter can still reach 5.4 percent, supported by various fiscal stimuli provided by the government.

The government has deployed an economic stimulus package totaling Rp 26.84 trillion from April to June 2026. This package includes measures such as food assistance, transportation incentives, internship programs, and subsidies for the manufacturing sector, all designed to sustain economic activity and preserve public purchasing power.

Despite these efforts, challenges persist. Global investors are maintaining a cautious stance, adopting a 'wait and see' approach due to the ongoing global economic slowdown, high interest rates, and volatile oil prices contributing to inflation. This international hesitancy could impact future investment in Indonesia.

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Global investors are also adopting a wait-and-see attitude amid the global economic slowdown, high interest rates, and oil price fluctuations that are triggering inflation.

However, Indonesia's fiscal condition remains stable. State revenue reached Rp 1,459.4 trillion in the first half of 2026, a 21.4% increase compared to the same period last year. This performance indicates the government's capacity to manage fiscal health effectively, which is viewed positively by the market.

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This achievement is a positive signal for the market because it shows the government's ability to maintain fiscal health amidst global economic dynamics. This is quite a positive development for the market.