The Indonesian government is optimistic that economic growth in the first quarter of 2026 will reach 5.5-6 percent, breaking the stagnant pattern around 5 percent. Finance Minister Purbaya Yudhi Sadewa stated this at the Indonesia Economic Outlook 2026 event in Jakarta.
At the Indonesia Economic Outlook 2026 event in Wisma Danantara, Jakarta, on February 13, 2026, Finance Minister Purbaya Yudhi Sadewa presented a target for economic growth in the first quarter of 2026 at 5.5-6 percent, with a full-year projection of 5.4-6 percent. "If this happens, it means we have escaped the 5 percent growth curse," Purbaya said.
Throughout 2025, Indonesia's economy grew 5.11 percent annually, with the fourth quarter reaching 5.39 percent, the highest in the G20. This trend serves as an initial foundation for 2026. To maintain momentum, state spending in the first quarter of 2026 is projected at Rp 809 trillion, including holiday allowances (THR) for civil servants, military, and police amounting to Rp 55 trillion. The Ramadan and Eid al-Fitr momentum is expected to boost household consumption.
Real sector indicators show improvement, with the manufacturing index (PMI) in January 2026 at 52.6, in the expansion zone. Retail and vehicle sales also strengthened at the end of 2025. The government relies on a combination of fiscal spending, liquidity strengthening, and macroeconomic stability. The 2026 state budget deficit is maintained at 2.68 percent of GDP, below the 3 percent limit.
Purbaya emphasized that the 3 percent deficit limit will not be changed despite pursuing expansion. "No (we will not change the deficit limit). I will focus on 3 percent and optimize the available space to create faster growth," he said. The 2025 deficit realization reached Rp 695.1 trillion or 2.92 percent of GDP as of December 31, 2025. The government is optimistic about sustained expansion until 2033 through fiscal-monetary policy synchronization and investment climate improvements. Counter-cyclical policies will be considered if needed.
