Indonesia Macro Update - GDP Growth 05 May 2026

KBVS MACRO UPDATE
Tuesday, 5 May 2026

MBG Boosts 1Q26 Growth, but at the Cost of Rising Fiscal Risks

Indonesia’s economy delivered a convincing beat in 1Q26, growing 5.61% YoY. This strength is most evident on the expenditure side, where government consumption surged 21.81% YoY (Prev: 3.25% YoY). On the production side, the narrative is consistent with the demand story, services sectors led the expansion, amplified by Ramadan and Lebaran effects.

Looking ahead, the near-term outlook remains constructive but increasingly complex. At the same time, external vulnerabilities are becoming more visible. Coupled with the risk of a wider fiscal deficit from large-scale programs like MBG.

 

Regards,
Fikri C Permana, Khairunnisa N S - KBVS Research Team

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