Growth in household spending, which makes up more than half of GDP, rose by an annual 5.52 per cent in the quarter, helped by the Muslim holy month of Ramadan. Spending, including on travel, normally rises during the festivities, which started in mid-February this year.
Investment expanded by 5.96 per cent, slightly slower than the 6.12 per cent growth in the previous quarter.
Prabowo came into office in late 2024 pledging to lift growth, which had hovered around 5 per cent since the pandemic, to 8 per cent during his term.
However, he faces challenges including budget pressures and from the war in the Middle East, which has led to higher energy prices and a weaker rupiah.
The government is targeting 5.4 per cent GDP growth for 2026, while Bank Indonesia forecast growth of 4.9 per cent to 5.7 per cent for the year.
The International Monetary Fund last month cut its global growth outlook for 2026 due to war-driven energy price spikes. It also shaved 0.1 percentage points off its outlook for Indonesia, cutting its forecast to 5 per cent.
Read the full article here
