Indonesia's Economy Grows 5.29% in Q2 2026, Driven by Key Sectors

The Central Statistics Agency (BPS) reported that Indonesia's economy grew by 5.29 percent year-on-year in the second quarter of 2026. Indonesia's Gross Domestic Product (GDP) in the second quarter of 2026 reached IDR 6,552 trillion on a prevailing prices basis (ADHB) and IDR 3,576 trillion on a 2020 constant prices basis (ADHK). M. Edy Mahmud, BPS Deputy for Balance and Statistical Analysis, stated that the five main business fields that contributed the most to the national GDP were the processing industry, agriculture, trade, construction, and mining. "The total of the five fields covers about 63.73 percent of Indonesia's total GDP," he said in a press conference on Wednesday, August 5. Edy noted that among various business sectors, the procurement of electricity and gas recorded the highest growth of 10.81 percent. "This increase is due to an increase in electricity sales for all consumer segments, especially households, businesses and industries," he said. He added that the provision of accommodation and food and beverage sectors also grew by 10.60 percent, supported by an increase in hotel occupancy rates and demand for catering services as the coverage of recipients of the Free Nutritious Meal Program expanded. In addition, the information and communication sector grew 6.97 percent, thanks to the increasingly widespread use of telecommunications services in various sectors, such as health, education, trade, and other sectors. On the other hand, Edy said the mining sector experienced a contraction of 1.64 percent on an annual basis. This decline was triggered by the weakening of the production of metal ore mining, which contracted 9.42 percent due to the decline in bauxite, tin, and nickel production. "In addition, the underground mine operations in the Grasberg Block Cave in the Central Papua province have not recovered after the landslide or mudflow incident in September 2025," he said. He added that contractions also occurred in the coal and lignite mining sub-sector, which fell 1.41 percent (yoy). This was influenced by the arrangement of production quotas in the Company Work Plan and Budget (RKAP) 2026 to maintain a balance of supply and support the stability of coal prices in the global market. Meanwhile, the oil, gas, and geothermal sub-sector contracted by 2.15 percent due to a decline in the natural productivity of oil and gas wells and the still limited discovery of new reserves. Meanwhile, although the mining sector weakened, most other business fields still recorded positive growth. The processing industry grew 4.52 percent, the agricultural sector increased 3.80 percent, while the construction sector grew 6.68 percent annually. Information source: VOI English