Indonesia's economy grew 5.47 percent year on year in the third quarter of 2026, supported by domestic demand, investment, exports and government spending, according to the Ministry of Finance.
Finance minister Suahasil Nazara said the state budget has helped protect household purchasing power, support businesses and cushion external pressure. Household consumption grew 5.04 percent year on year, helped by maintained purchasing power, higher mobility and strong domestic demand.
Government Spending and Investment
Spending on restaurants and hotels grew 6.59 percent year on year as consumption of prepared food at eateries rose. Government consumption grew 8.95 percent, driven by a 39.7 percent increase in goods spending.
Investment, or gross fixed capital formation, grew 6.06 percent year on year, while foreign direct investment in the third quarter rose 27.4 percent. Real exports of goods and services grew 4.59 percent, supported by crude palm oil, coal and downstream nickel, copper and aluminium products.
Budget support includes fiscal stimulus, social assistance, social protection and food price stabilisation, listed as instruments protecting purchasing power.
Spending on personnel rose 10.3 percent year on year in the same period, alongside the larger rise in goods spending within the government consumption component.
Industry and Regions
Manufacturing remained the main engine of growth, expanding 5.87 percent year on year on the strength of strategic downstream subsectors.
Bali and Nusa Tenggara recorded the highest regional growth at 6.08 percent, while Java grew 5.84 percent. Capital spending, priority infrastructure projects and investment through state-owned enterprises and Danantara serve as levers for private investment.
Trade grew 7.14 percent year on year, according to the Ministry of Finance. Passenger car sales volume rose 25.95 percent in the same quarter.
Agriculture, forestry and fisheries moderated to 0.46 percent year on year. A prolonged El Nino dry season contracted food crops by 1.58 percent.
Who is affected
Households covered by social assistance and social protection are among the direct recipients of the budget measures. For these groups, transfers and protection schemes are the route through which purchasing power is held up when external pressure builds.
Motorcycle dealers and manufacturers are among the groups affected, with sales volume up 8.92 percent year on year. The increase in units sold reached showrooms and the companies producing those models during the quarter.
What is still unclear
No total envelope was given, and the split between stimulus spending and transfers remains unstated.
Officials have also not published a detailed realisation of the state spending that supported government consumption. No timeline was announced for further steps on food price stability after inflation was brought under control.