What was the impact of government expenditure on Q2 growth?

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Government Spending Boosted Indonesia's Q2 Economic Growth Beyond Expectations

Indonesia's economic growth in the second quarter reached 5.3 per cent, surpassing the projected 5.1 per cent, largely due to a significant increase in government expenditure alongside robust household spending. This performance indicates a positive contribution from public sector outlays to the overall economic expansion during the period.
Strong Government Expenditure Contribution

Government expenditure saw a substantial rise of nearly 16 per cent in the second quarter. This surge in public spending played a crucial role in bolstering the economy, helping to achieve a growth rate that exceeded initial forecasts.
Household Consumption Remained a Key Driver

Household expenditure, which constitutes over half of the gross domestic product, also demonstrated strong performance with a 5.1 per cent increase. This sustained consumer demand, partly attributed to holiday and religious spending momentum, provided a solid foundation for economic activity.
Growth Target and Future Stimulation Plans

The Indonesian government has set an ambitious target of achieving eight per cent economic growth by 2029. To support this objective and the economy for the remainder of the year, the Finance Minister indicated plans to implement various fiscal and monetary policies aimed at stimulating domestic growth.
Projected Second Half Growth

Looking ahead, the Finance Minister expressed optimism about the latter half of 2026, suggesting that economic growth could reach approximately six per cent. This projection underscores the government's commitment to actively managing the economy and fostering continued expansion through policy interventions.

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What was the impact of government expenditure on Q2 growth?

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