Indonesia’s economic growth moderated in the second quarter, expanding 5.3 percent compared to 5.6 percent in the previous quarter, according to data released Wednesday by Statistics Indonesia. Despite the slowdown, the growth rate surpassed market expectations, which had forecast a 5.1 percent increase.

Household spending, which constitutes over half of the country’s gross domestic product, rose by 5.1 percent during the April-June period. Moh Edy Mahmud, an official from Statistics Indonesia, attributed the strong consumer activity to holiday-related expenditures, including those linked to religious celebrations. Government spending also recorded a notable rise, increasing by nearly 16 percent, contributing to the overall economic performance.

President Prabowo Subianto’s administration has set a goal to achieve an annual growth rate of eight percent by 2029, an objective considered ambitious by many analysts given current trends. Some experts have expressed skepticism about the official figures. Gareth Leather, senior Asia economist at Capital Economics, remarked that while the reported growth beat expectations, underlying economic conditions suggest challenges ahead. He cited aggressive interest rate hikes by Indonesia’s central bank, which are expected to dampen household consumption and business investment moving forward.

The mixed signals from the data highlight both resilience in domestic demand and underlying pressures that may temper Indonesia’s near-term growth prospects. The government’s growth target remains a key focus as it seeks to balance stimulus measures with monetary policy tightening amid a complex global economic environment.