Indonesia's Economic Growth Slowed in Second Quarter

By Ying Xian Wong

Indonesia's economy expanded at a slower pace in the second quarter as higher fuel prices weighed on domestic and external demand.

Southeast Asia's largest economy expanded 5.29% from a year earlier in the April to June period, slowing from 5.61% in the first quarter, data from the country's statistics agency showed Wednesday.

That beat the median forecast of 5.1% growth from seven economists polled by The Wall Street Journal.

The slowdown came amid heightened volatility stemming from the continuing Middle East conflict and domestic uncertainty, including the surprise departure of Bank Indonesia Gov. Perry Warjiyo and mounting scrutiny of the government's economic policies and fiscal discipline.

These uncertainties could prompt businesses to adopt a wait-and-see approach, while attention has shifted to the appointment of Bank Indonesia's next governor. Acting Gov. Destry Damayanti is likely to ensure near-term policy continuity, given her role in shaping the central bank's policy framework since 2019.

Still, markets will closely scrutinize the appointment of a permanent governor and Bank Indonesia policy meeting this month for signs of any shift in policy priorities and the central bank's commitment to supporting the rupiah.

Looking ahead, the recent tightening in financial conditions, external uncertainty and still-cautious private-sector sentiment are likely to limit the pace of economic growth in Indonesia, ANZ said in a note prior to the release of gross domestic product data.

Write to Ying Xian Wong at yingxian.wong@wsj.com

(END) Dow Jones Newswires

August 05, 2026 00:47 ET (04:47 GMT)