Indonesia's Economy In 2025 Is Estimated To Be Still At The Average Level Of The Last 10 Years

JAKARTA - Indonesia's economic growth in the fourth quarter of 2025 is expected to increase compared to the achievement in the third quarter which grew by 5.04 percent year-on-year (yoy) on an annual basis. However, overall, the rate of economic growth throughout 2025 is projected to still last below 5 percent.

Head of the Macroeconomic & Financial Market Research Department of Bank Permata, Faisal Rachman estimates that national economic growth in 2025 will be in the historical average range of the last ten years, between 5.0 and 5.1 percent. This projection is slightly lower than the government's target in the 2025 State Budget which is set at 5.2 percent.

"The GDP Indonesia growth prospects still face a number of challenges, so it is important to maintain an expansive economic policy, especially through accelerating government spending in productive sectors with high multiplier effects," he said in his statement, quoted Thursday, November 6.

Towards the end of the year, Faisal projects household consumption will strengthen as the labor market is improved and the inflation rate is controlled.

Meanwhile, he added that investment prospects are expected to remain positive, supported by market expectations of lowering global and domestic interest rates that can reduce financing costs while increasing investor confidence in expansion.

However, he stressed that this condition also has the potential to encourage an increase in imports, considering that most imported goods are raw materials and capital goods for production activities.

Furthermore, Faisal predicts that import growth will be higher than exports, which are still under pressure by global trade wars and China's economic slowdown. Even so, trade tensions began to show signs of easing as the United States government was more open to the negotiation process.

He added that the diversification of trading partners that Indonesia continues to strive for as well as the recovery of global commodity prices is expected to help support national export performance.

"Overall, we project that GDP 2025 growth will be in the range of 5.0'5.1 percent compared to 5.03 percent in 2024, this is a revision up from the previous projection which estimated growth to be slightly below 5 percent," he said.

Entering 2026, he assessed that the risk to Indonesia's economic prospects is still relatively the same as this year.

From an external perspective, he expressed uncertainty due to trade wars, geopolitical tensions, and the slow recovery of China's economy will still overshadow. However, global economic conditions that tend to stagnate are expected to suppress inflationary pressures, open space for further interest rates, and encourage investment interest in emerging markets, including Indonesia.

On the domestic side, Faisal emphasized that maintaining political stability will be a crucial factor. Although there is still room for fiscal and monetary expansion, as well as the importance of policymakers maintaining a balance between growth boosts and macroeconomic stability.

"Given that the current account deficit (CAD) has the potential to widen amid trade tensions and the fiscal deficit could increase due to pro-growth policies," he concluded.