JAKARTA - PT Bank Mandiri (Persero) Tbk estimates that Indonesia's economic growth in the first quarter of 2025 will grow by 4.91 percent year on year (yoy) or slow down from economic growth in the fourth quarter of 2024 by 5.02 percent (yoy).
Chief Economist of Bank Mandiri Andry Asmoro revealed that there are several factors that caused the slowdown in economic growth in the first quarter of 2025, namely first, household consumption growth is expected to be below 4.9 percent (yoy) in the first quarter of 2025, slowing down from 5.0 percent (yoy) in the fourth quarter of 2024.
"This reflects the public's tendency to carry out spending carefully, with some income allocated for savings just in case," citing a written statement from Bank Mandiri, Sunday, May 4.
Next, government spending is also expected to decrease to 3.3 percent (yoy) in the first quarter of 2025, from the previous 4.3 percent (yoy) in the fourth quarter of 2024, in line with policy adjustments and slow budget disbursement at the beginning of the year.
Then, this condition also burdens investment, which is projected to only grow 1.7 percent (yoy) in the first quarter of 2025, or decrease from 4.9 percent yoy in the fourth quarter of 2024.
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Bank Mandiri assesses that the postponement of budget distribution, especially for government-backed infrastructure and investment projects, has made the rate of capital formation weaker.
Furthermore, foreign trade performance is expected to weaken in early 2025, reflecting the weakening of global trade momentum.
Meanwhile, export growth is estimated to slow to 5.9 percent (yoy) in the first quarter of 2025, from the previous 10.2 percent (yoy) in the previous quarter.
"While import growth is expected to decrease to 2.7 percent from the previous 11.3 percent," he wrote.
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