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Indonesia’s Q1 economy remains solid on strong consumption: BPS

Jakarta (ANTARA) – Statistics Indonesia (BPS) said the country's economic fundamentals remained solid in the first quarter of 2026, supported by household consumption, investment, and accelerated government spending.”Indonesia's economic fundamentals during the first quarter of 2026 remained solid,” BPS head Amalia Adininggar Widyasanti said in Jakarta on Tuesday.BPS recorded that Indonesia's economy grew 5.61 percent year-on-year in the January-March 2026 period, driven by consumption, investment, and government fiscal stimulus.Amalia said household consumption remained the main driver of growth, accounting for more than half of national economic expenditure.Household consumption expanded 5.52 percent, contributing 54.38 percent to gross domestic product (GDP) and 2.94 percentage points to overall economic growth.According to Amalia, public purchasing power remained stable, supported by higher mobility during Ramadan and Eid al-Fitr.Consumption growth was also reflected in increased activity in trade, transportation, restaurants, hotels, and digital economic transactions during the holiday period.Gross fixed capital formation, or investment, grew 5.96 percent and contributed 28.29 percent to GDP.Investment contributed 1.79 percentage points to first-quarter economic growth.Amalia said investment growth was supported by higher demand for capital goods such as machinery and vehicles for production and business expansion.”Capital goods imports rose 14.27 percent, while foreign and domestic investment realization increased 7.2 percent. Government capital spending also expanded 36.7 percent,” she said.Government consumption grew 21.81 percent and contributed 1.26 percentage points to national economic growth.Amalia said government spending in the first quarter was significantly higher than usual due to fiscal stimulus policies introduced under President Prabowo Subianto's administration.She added that faster realization of government spending and incentives created an earlier multiplier effect on economic activity compared to previous years.Transportation and warehousing posted the highest growth at 8.04 percent, followed by trade at 6.26 percent, manufacturing at 5.04 percent, and agriculture at 4.97 percent.According to Amalia, growth in those sectors showed domestic economic activity continued to grow despite global uncertainty and slowing world economic conditions.