3 July 2025 (closed)
Jakarta Composite Index (6,878.05) -3.19 -0.05%
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Will Indonesia’s Economic Growth Continue to Slow? What Do the Latest Macroeconomic Data Say?
As usual, we are going to take a close look at the latest available macroeconomic data of Indonesia to assess the current state of the Indonesian economy. Last month, we came to the conclusion that –overall– conditions seemed a bit weakening (with most macroeconomic indicators revealing some softness), thus suggesting that economic growth is (further) slowing in Indonesia.
Indeed, the country’s first quarter (Q1-2025) official gross domestic product (GDP) growth rate already confirmed slowing economic growth. Will this continue into Q2?
Moreover, in recent months we saw the International Monetary fund (IMF) and the World Bank making downward revisions to their economic growth projections for Indonesia. Both organizations put their growth projections for 2025 at 4.7 percent year-on-year (y/y) amid slowing global economic growth (particularly attributed to geopolitical turmoil, trade tensions, and shifting monetary policies in the advanced economies).
The Asian Development Bank (ADB), on the other hand, remains more optimistic as it kept its economic growth projection for Indonesia at 5.0 percent (y/y) in 2025, a projection that is underpinned by strong domestic demand, accommodative policies (both fiscal and monetary) at home, and new government programs.
So, now let’s zoom in on the latest available macroeconomic data that were released by Badan Pusat Statistik (BPS), Bank Indonesia, and other institutions. In particular it is interesting to take a look at those data that reflect the state of domestic demand. After all, household consumption accounts for around 55 percent of Indonesian GDP.
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