Indonesia’s gross domestic product grew 5.5 percent year-on-year in the third quarter, up from 5.2 percent in the second quarter, according to Standard Chartered analyst Aldian Taloputra. The bank said the figure beat both its own expectations and the consensus, and attributed the strength to relatively steady household consumption, investment and exports.
Taloputra said the bank was keeping its 2026 GDP growth forecast at 5.3 percent. Year-to-date growth stands at 5.5 percent, which he described as a strong rebound and a reason the forecast carries some upside risk.
Household spending holds up
Household consumption grew by more than 5.0 percent year-on-year in the quarter, despite higher food and imported inflation. Energy subsidies and social spending have helped sustain purchasing power even as oil prices rose.
The government has planned about IDR 31 trillion in stimulus for the end of the year, mostly food assistance and wage subsidies. Standard Chartered expects that spending to support household consumption in the fourth quarter.
Caution on the outlook
The bank is less upbeat about the near term. Taloputra said business sentiment remains cautious and the formal-sector recovery is weak. Both are likely to weigh on growth for now.
Narrowing fiscal buffers could also limit how much support the state can give households. That constraint, the bank said, matters most for purchasing power.
