JAKARTA, April 10 — Indonesia is optimistic its economy will expand by at least 5.5 per cent in the first quarter (1Q) this year, supported by resilient domestic demand and stable fiscal performance.

Coordinating Minister for Economic Affairs Airlangga Hartarto said the government expects full-year growth to reach at least 5.4 per cent, in line with the assumptions set in the state budget (APBN).

“For the first quarter, we are optimistic it will be at least 5.5 per cent. Then, by the end of the year, it will be at least 5.4 per cent, in line with the APBN projection,” he said, according to Antara News Agency, late Thursday.

Airlangga noted that the outlook remains subject to global uncertainties, including geopolitical tensions in the Middle East that could affect energy prices and global supply chains.

Despite this, Airlangga said Indonesia’s economic fundamentals remain strong, with household consumption contributing about 54 per cent to gross domestic product (GDP), underpinning growth momentum.

From the fiscal side, he said state revenue performance has been encouraging, with tax collection rising 14.3 per cent to about Indonesian rupiah 462.7 trillion as of March, while the manufacturing sector continues to expand.

Airlangga also said the government’s growth assumptions factor in global oil price fluctuations, with Indonesia’s average crude purchase price estimated at around US$76 (RM302) per barrel.

“Every US$1 increase in fuel prices has an impact on the state budget of roughly Indonesian rupiah 6 trillion. The net impact, after accounting for gains from commodity exports and subsidies is also approximately Indonesian rupiah 6 trillion. Figures like that can still be absorbed by the state budget,” he said.

On food security, he said rice production reached 34.7 million tonnes in 2025, with current reserves at state logistics agency Bulog standing at around 4.6 million tonnes.

Looking ahead, he said the government is preparing strategic measures to sustain growth and stability, including the implementation of the B50 biodiesel programme from July 1, 2026, which is expected to generate savings of up to Indonesian rupiah 48 trillion.

At the same time, Indonesia remains committed to fiscal discipline, maintaining its debt ratio at around 40 per cent of GDP, well below the legal ceiling of 60 per cent, and keeping the budget deficit at about three per cent through year-end. — Bernama