Is Indonesia growing faster?

INDONESIA - Report 11 May 2026 by Cyrillus Harinowo

Indonesia is entering an interesting period. As just released by the Central Board of Statistics, Indonesia's economy grew 5.61% Y/Y in the first quarter of 2026. At a time when the global economy is in the midst of major geopolitical uncertainty, especially due to the US, Israel vs. Iran war, Indonesia has emerged as a country growing faster economically.

If we scrutinize further, Indonesia's economy in the first quarter of 2026 grew fast due to relentless support from the government. Indonesian government expenditure grew by more than 21% quarter over quarter. However, such rapid government expenditure growth will certainly not last forever due to the law requiring Indonesia's fiscal deficit to be capped below 3% of GDP. This front-loaded government expenditure will also create problems in financing the deficit.

In other economic news, the Central Board of Statistics released the trade balance for March 2026. The trade balance registered a higher surplus in comparison to the previous month. Exports increased slightly, by 1.62% M/M, to reach $22,526.8 million, while imports decreased by 8.08% to $19,205.8 million. This March, the surplus reached $3,221 million, 161% higher than the previous month's $1273.3 million.

The Central Board of Statistics also released its inflation report. In April 2026, M/M inflation was 0.13%. Given that level of M/M inflation, Y/Y inflation in April was 2.42%.

Now read on...

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