- Indonesia’s GDP growth unexpectedly accelerated to 5.47% YoY in Q3-26, driven entirely by net exports on the back of higher coal production and CPO demand. In contrast, domestic momentum softened as consumption, investment, and government spending all recorded slower growth compared to Q2-26.
- Consumer consumption slowed in real terms as rising core inflation and El Niño eroded purchasing power. Meanwhile, despite positive contributions from financial services and automotive trade, loan growth was driven largely by working capital needs, partly due to worsening corporate cash flows and higher prices.
- With the GDP deflator accelerating to 5.5% YoY, persistent price pressures, coupled with the lagged effects of Rupiah depreciation and higher yields, will continue to squeeze purchasing power and business margins. Thus, Q4-26 GDP is expected to moderate to the 5.0% - 5.2% range.
