Analysis of Indonesia's Economic Conditions Amid Global Conflict and Increased Government Spending in the First Quarter of 2026

Shakila Dian Nova; Devi Prameswati; Shabilla Risty Eka; Wahyuningsih; Nadia Sulistyaningsih; Ahmad Setiawan Nuraya

doi:10.63922/ijebir.v5i04.4063

Shakila Dian Nova Management, STIE Indonesia Banking School
Devi Prameswati Management, STIE Indonesia Banking School
Shabilla Risty Eka Management, STIE Indonesia Banking School
Wahyuningsih Management, STIE Indonesia Banking School
Nadia Sulistyaningsih Management, STIE Indonesia Banking School
Ahmad Setiawan Nuraya Management, STIE Indonesia Banking School

DOI: https://doi.org/10.63922/ijebir.v5i04.4063

Keywords: Economic Growth, Fiscal Policy, Geopolitical Conflict, Government Expenditure, Inflation

Abstract

Indonesia's economic growth in the first quarter of 2026 showed positive performance amidst global conflict and increasing government spending. This study aims to analyze Indonesia's economic conditions by examining the role of government spending, inflation, and the impact of global conflict on economic growth and public welfare. The study used a qualitative approach with descriptive methods. The study population included documents and publications related to economic growth, inflation, government spending, exchange rates, and global conflict from January 2025 to March 2026. The sample was determined purposively from reports from the Central Bureau of Statistics, Bank Indonesia, the Ministry of Finance, Encyclopaedia Britannica, and relevant scientific literature. The research instrument was the researcher with the help of a data abstraction sheet. Data were collected through documentation and literature studies, then analyzed using the Miles, Huberman, and Saldaña model. The results showed that Indonesia's economic growth reached 5.61% and was supported by household consumption and increased government spending. However, pressures on the cost of living, high prices of basic necessities, and the impact of global conflict still affect people's purchasing power. In conclusion, economic growth remains maintained, but its benefits have not been fully felt evenly, so more inclusive and sustainable policies are needed to improve people's welfare.

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