Societe Generale economist Kunal Kundu notes Indonesia\u2019s 2Q26 Gross Domestic Product (GDP) grew 5.3% year-on-year, beating the bank\u2019s 5.1% forecast, but warns the composition is less reassuring. Public spending was the main support, while non-government GDP, private consumption and manufacturing stayed weak. Investment improved but boosted imports, and a large statistical discrepancy clouds assessment of Indonesia\u2019s growth quality.<\/p>\n
Public-led growth masks private softness<\/p>\n
“Indonesia\u2019s 2Q26 real GDP growth came in stronger than expected (5.3% yoy versus SGe 5.1%), but the composition of the data suggests that the headline number should be interpreted with caution.”<\/p>\n
“As a result, non-government GDP growth continued to languish, reinforcing the view that underlying economic momentum remains softer than the headline print suggests.”<\/p>\n
“This matters because growth led by public spending is qualitatively different from growth driven by private demand.”<\/p>\n
“This weakens the case for interpreting the GDP<\/a> data as evidence of a strong consumer-led recovery.”<\/p>\n “The key takeaway is that Indonesia\u2019s economy continues to grow, but the quality, breadth, and reliability of that growth remain open to question.”<\/p>\n