Indonesia's economy expanded 5.47% year-on-year in the third quarter, beating forecasts of 5.2% and accelerating from 5.29% growth in the second quarter, government data showed Thursday. Quarter-on-quarter growth reached 1.6%, surpassing expectations of 1.3% but decelerating sharply from 3.7% in the prior quarter.
Manufacturing drove the outperformance, particularly the processing of palm oil for fuel as Indonesia expanded its mandatory biodiesel program, according to the statistics bureau. The country faces weaker investor sentiment this year due to scrutiny of government fiscal plans and downgrade risks.
The 2026 state budget projects 5.4% growth. Finance Minister Suahasil Nazara said growth could slightly exceed that target and reach 5.5% this year.