Indonesia’s Economy Faces Q1 Headwinds, Eyes Recovery in Q3 2026

RRI.CO.ID, Jakarta - The Indonesian economy faced headwinds in the first quarter of 2026 (Q1 2026), reflected in a decline in the Consumer Confidence Index (CCI) and continued contraction in the manufacturing Purchasing Managers’ Index (PMI).

Bank Indonesia (BI) data showed the CCI fell to 117.8 in June from 120.9 in May, while the manufacturing PMI contracted to 46.9 in June.

Nevertheless, Coordinating Minister for Economic Affairs, Airlangga Hartarto, assessed that consumer confidence remains stable at the 100-point level.

“In the previous quarter, there was the Eid al-Fitr holiday, which doesn’t occur every quarter. Typically, after that, the CCI does drop slightly,” Minister Airlangga said in Jakarta on Friday, July 10, 2026, as quoted by Antara.

Minister Airlangga expressed optimism that Indonesia’s economy will rebound in Q2 2026. “We’ll see, as we approach the third and fourth quarters, the economy will grow again,” he said.

Meanwhile, economist and Paramadina University rector Didik J. Rachbini of the Institute for Development of Economics and Finance (INDEF) said the decline in the manufacturing PMI requires serious government attention.

“This PMI figure is an indication that our industrial sector has not been doing well for quite some time and has now entered the danger zone, with the index below 50,” Didik said.

He emphasized that strengthening the national industry is crucial to sustaining economic growth. In his view, a strong manufacturing sector, productive investment, and job creation are the main foundations for long-term growth. ***