Indonesia’s Economic Growth Slows in First Quarter of 2025
Statistics Indonesia (BPS) reported that in the first quarter of 2025, Indonesia's economy grew by only 4.87% compared to the same period in 2024 (year-on-year).
This growth rate marks a slowdown from the 5.11% recorded in the first quarter of 2024. It also shows a deceleration compared to the previous quarter, Q4 2024, which saw a growth rate of 5.02%.
The slowdown occurred across nearly all components of Gross Domestic Product (GDP), including household consumption. In quarter (Q1) 2024, household consumption grew by 4.91%, and by 4.98% in Q4 2024. However, in Q1 2025, it rose by only 4.89%.
The same trend was seen in the components of Non-Profit Institutions Serving Households (LNPRT) consumption, government consumption, and Gross Domestic Fixed Capital Formation (PMTB) or investment. Meanwhile, exports and imports only slowed down from Q4 2024.
Economic Growth by Industry Sector
By industry sector, the manufacturing industry remained the largest contributor to economic growth, accounting for 0.93%. The second-largest contributor was wholesale and retail trade; repair of motor vehicles and motorcycles, contributing 0.66%, followed by the information and communication sector at 0.53%.
For context, Indonesia’s economic growth is measured using Gross Domestic Product (GDP) at current prices and constant prices. GDP at current prices was recorded at IDR 5,665.9 trillion, while GDP at constant prices stood at IDR 3,264.5 trillion.
Economy Slows Amid Global Uncertainty
The government believes that despite the slowdown, Indonesia’s economy in the first quarter remains in good condition. This is because, even amid global uncertainty, the country has managed to maintain positive growth.
Minister of Finance Sri Mulyani also noted that public purchasing power remains stable, contributing to the 4.89% growth rate.
"Public purchasing power has remained intact, supported by various government incentives such as the disbursement of holiday bonuses (THR) and various fiscal stimuli," said Sri Mulyani, as quoted in her official statement.
Nevertheless, the government acknowledged that the challenges ahead remain significant. The dynamics of the global economy continue to be highly challenging and difficult to navigate. (ASP/KEN)
