Economic Growth Is Still Weak, BI Highlights Consumption And Investment

JAKARTA - Bank Indonesia (BI) stated that household consumption in Indonesia still shows weaknesses in the third quarter of 2025.

BI Governor Perry Warjiyo said this condition was influenced by the decline in optimism of middle and lower income people and difficulties in obtaining jobs.

"Indonesia's economic growth needs to be increased so that it is in accordance with the economic capacity. In the third quarter of 2025 a number of indicators show that household consumption is still not strong, influenced by declining consumer expectations, especially in the lower middle class and limited employment availability," he said. press conference, Wednesday, September 19.

Furthermore, Perry emphasized the importance of strengthening the investment side through accelerating the implementation of various government priority programs, including the development of special economic zones in various regions.

"Meanwhile, exports are predicted to be better supported by the increase in exports of agricultural and manufacturing products, especially palm oil (CPO) commodities to India in line with the decline in import duties," he added.

In terms of fiscal, Perry projects to increase government spending in the second half of 2025, in line with the implementation of various national strategic projects such as food security programs, energy, and the implementation of the newly launched 2025 economic policy package.

He conveyed that Bank Indonesia continues to strengthen the mix of monetary, macroprudential, and payment systems to encourage economic growth through lower interest rates, easing liquidity, increasing macroprudential incentives, and accelerating economic and financial digitization.

"With the strengthening of the policy synergy between Bank Indonesia and the Government, economic growth in the second semester of 2025 is expected to improve so that overall in 2025 it will be above the midpoint in the range of 4.6 percent to 5.4 percent," he concluded.