Jakarta. Indonesia’s domestic economy is projected to accelerate significantly in the first quarter of 2026, with growth estimated to reach 5.4% year-on-year (YoY), supported by massive government spending and the Ramadan and Eid momentum.

Chief Economist at Bank Mandiri, Andry Asmoro, outlined three key drivers expected to boost economic performance at the start of the year.

The first factor is the acceleration of state spending, which is targeted to reach around Rp 800 trillion ($47.7billion) in the first quarter. The second factor is the low base effect, meaning growth appears stronger because it is compared to a relatively lower base in the same period last year.

“Because of the low base effect and the accelerated budget. Spending is being disbursed more quickly, with the first-quarter target at around Rp 800 trillion,” Andry said in Jakarta on Wednesday.

The third driver is the National Religious Holidays (HBKN) period of Ramadan and Eid al-Fitr, which will fall between February and March 2026. Historically, this seasonal momentum has triggered a surge in household consumption.

“So at the very least it should be flat, and it could even exceed 5.4% because of those three factors,” Andry emphasized.

To reinforce the growth momentum, the government has rolled out several tactical measures, including discounts on air and sea transportation tickets, toll road tariff discounts, and the acceleration of Holiday Allowance (THR) disbursement for civil servants.

The series of stimulus policies is expected to strengthen purchasing power, ensuring domestic consumption continues to play an optimal role in supporting the national economic structure.