The Economy Of The Second Quarter Of 2025 Is Predicted To Be Driven By Government Expenditures

JAKARTA - PT Bank Mandiri (Persero) Tbk estimates that Indonesia's economic growth in the second quarter of 2025 will only reach 4.92 percent.

Bank Mandiri's Head of Macroeconomics and Financial Market Research Dian Ayu Yustina said this figure showed a slight increase compared to the realization of growth in the first quarter of 2025 which was 4.87 percent.

"We see that in the second quarter, there is actually a possibility for economic growth to pick up. We see that in the first quarter of 2025 it was 4.87 percent, our interim calculation in the second quarter of 2025 might be that economic growth could reach 4.92 percent," he said at the Mandiri Economic Outlook in the second quarter of 2025, Monday, May 19.

He explained that the main driver of economic growth in the second quarter was government spending, along with the reopening of the budget previously blocked by the Ministry of Finance.

"The Driver, especially from government spending, is because we see that some of the spending has been unlocked and this can support the acceleration of spending and also government spending in the future", he said.

Meanwhile, he said household consumption is expected to remain stable, influenced by Eid momentum in the second quarter of 2025.

"The growth in consumption may grow stable, because we do see that there is also a normalization process after Eid al-Fitr in the second quarter, so there is also a seasonal factor here," he added.

Dian also added that there is room for easing policies, both monetary and fiscal, which is expected to contribute to economic growth in the second quarter of 2025.

Similarly, Bank Mandiri's Chief Economist, Andry Asmoro, assessed that the opportunity for acceleration remains open through effective fiscal and monetary policy synergies in maintaining purchasing power and encouraging investment so that this can be measured through the agricultural sector which shows impressive performance, driven by intensification programs such as pumping and fertilizer distribution.

He said increased productivity was also expected through extensification measures, including the planned opening of new land.

Mobility-related sectors, such as transportation, hospitality, information and communication, and entertainment, continue to support growth. The shift in lifestyle to experience-based consumption encourages economic turnover in the service sector," he said.

He also assessed that commodity prices that were still relatively high still had a positive contribution to the company's exports and revenues.

"Despite price corrections, margins are still at a reasonable level and support external sector stability," added Andry.

According to the analysis of the Bank Mandiri Economist Team, Bank Indonesia's monetary policy is estimated to remain accommodative throughout 2025, with an open easing room as long as price stability and exchange rates are maintained.

On the other hand, he said accelerating the realization of government spending would be an important cushion for global uncertainty.

Furthermore, in terms of purchasing power, research on Mandiri Sharing Index (MSI) until May 11, 2025, recorded a level of 257.9 points, reflecting the recovery of post-Eid public spending. Labor and Vesak Holidays are one of the factors driving the increase in public consumption, especially in the transportation and travel categories.

"People's spending was recorded to have increased significantly in early May, although it later experienced normalization. The provinces of tourist destinations such as DIY, Central Java, and East Java recorded the highest increase during the long holiday period," he added.