Airlangga Encourages Economic Growth 2025 Through Downstreaming, State Expenditures, And Social Protection

JAKARTA - The Central Statistics Agency (BPS) reported that Indonesia's Gross Domestic Product (GDP) in the third quarter of 2025 grew by 5.04 percent (yoy), remaining on track to achieve the annual growth target of 5.2 percent.

"GDP growth of 5.04 percent (yoy) in the third quarter of 2025 shows the fundamental strength of the national economy, driven by solid household consumption, increasing investment, as well as well as well-coordinated fiscal and monetary policies," said Coordinating Minister for Economic Affairs Airlangga Hartarto in his statement quoted Thursday, November 6.

Airlangga added that the Government is committed to maintaining this momentum through support for the productive sector and downstreaming industry, accelerating state spending, and strengthening social protection.

He conveyed optimism for the Indonesian economy as well as reflected in the IMF report which has increased Indonesia's economic growth projections for 2025 and 2026 and made Indonesia one of the "bright spots" amid the slowdown in the global economy.

According to him, Indonesia's economic performance is better than most ASEAN and G20 countries such as Saudi Arabia 5.0 percent (yoy); China 4.8 percent (yoy); Singapore 2.9 percent (yoy); and South Korea 1.7 percent.

In terms of business fields, the highest growth was recorded in the education services sector, along with the start of the new school year and the increase in education spending, as well as the services of companies that were encouraged to increase labor rental and services activities.

Meanwhile, the sector with the largest contribution to GDP remains dominated by the processing industry (19.15 percent), trade (14.25 percent), and agriculture (13.19 percent).

Regionally, the national economy is also increasingly inclusive. Java Island grew 5.17 percent with a contribution of 56.68 percent to the national GDP, followed by Sulawesi (5.84 percent), Sumatra (4.90 percent), Kalimantan (4.70 percent), and Maluku and Papua (2.64 percent) driven by natural resource processing activities.

In terms of demand, household consumption remains the main motor with a growth of 4.89 percent (yoy), supported by government stimulus and increased community mobility.

In addition, investment has also increased significantly, as reflected in the realization of PMA and PMDN until the third quarter of 2025 which reached Rp1,434.3 trillion (growing 13.7 percent yoy). The Manufacturing PMI index in October 2025 was at an expansive level of 51.2, indicating the potential for acceleration in the next quarter.

Price stability is maintained with inflation in October 2025 at 2.86 percent (yoy), still in the target range of 2.5 percent plus minus 1 percent.

Next, external conditions are also solid with foreign exchange reserves of 148.7 billion US dollars and foreign debt ratios at a safe level.

Airlangga added that the Government continues its contradicial policy to support growth through accelerating the realization of state spending in the fourth quarter, strengthening social protection programs for more than 35 million beneficiary families, as well as various consumption and transportation stimulus ahead of Christmas and New Year.

On the investment and industry side, he stated that the Government is strengthening downstreaming through the completion of strategic projects, including the Integrated Petrochemical Factory PT Lotte Chemical Indonesia in Cilegon worth US$4 billion which will be inaugurated on November 6, 2025.

"With this achievement, the Government is optimistic that Indonesia's economic growth in 2025 will remain on a positive and inclusive path. The government will continue to maintain the momentum of growth through adaptive, collaborative, and community welfare-oriented policies," he concluded.