Speaking at a press conference following the KSSK Periodic Meeting in Jakarta on Monday, Minister of Finance and KSSK Chair Purbaya Yudhi Sadewa acknowledged that while economic growth likely experienced a slight moderation in the second quarter of 2026, strong momentum is expected to resume in the second half of the year.
Purbaya noted that Q2 growth is anticipated to fall slightly below the first quarter's pace, hovering near 5.4 percent. The temporary slowdown reflects peak external uncertainties during the quarter, including Middle East conflicts and elevated global oil prices, alongside fiscal adjustments to safeguard the State Budget (APBN).
"However, we believe economic growth in the second semester of 2026 will be better," Purbaya said, citing close policy coordination with Bank Indonesia to sustain momentum and provide targeted economic stimulus.
To bolster domestic demand in the coming months, the government plans to introduce targeted incentives.
"In the near future, we will announce a stimulus for electric cars and motorbikes, which will be officially announced by the President," Purbaya revealed.
The growth outlook is further supported by solid state budget execution through the end of the second quarter of 2026.
On the spending side, total state expenditure expanded by 17.8 percent year-on-year to reach Rp1,656 trillion (approximately US$92.1 billion). This surge was primarily driven by central government spending, which grew 29.4 percent year-on-year to Rp1,298.6 trillion (US$72.2 billion) as the government accelerated key national initiatives.
These disbursements funded major programs including the Free Nutritious Meals (MBG) campaign, social assistance packages, infrastructure projects, energy subsidies, and mandatory civil servant compensation such as holiday allowances and the 13th-month salary.
State fiscal performance was equally bolstered by robust revenue generation, which climbed 21.4 percent year-on-year to Rp1,459.4 trillion (US$81.2 billion). Tax collection served as the primary engine of this growth, jumping 24.6 percent to Rp1,035.7 trillion (US$57.6 billion) due to economic activity and the Coretax administration system.
Additional fiscal support came from non-tax state revenue (PNBP), which rose 21.6 percent to Rp271.0 trillion (US$15.08 billion), as well as a recovery in customs and excise receipts, which edged up 3.4 percent to Rp152.0 trillion (US$8.45 billion).
To balance these fiscal operations amid shifting global market conditions, budget financing totaled Rp452.0 trillion (US$25.15 billion) by the close of the second quarter, representing a 59.4 percent increase year-on-year.
The government managed this financing through a combination of prudent debt management, optimized cash flow reserves, and careful monitoring of overall financial market dynamics.
Purbaya expressed confidence that accelerated government spending and an improved investment climate in the second half of the year will maintain system-wide liquidity and support full-year growth targets.
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Translator: Rizka Khaerunnisa, Yashinta Difa
Editor: Azis Kurmala
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