BI Boss Explains Indonesia's Economy Needs To Be Encouraged To Comply With Capacity

Economic Growth (Unsplash)

JAKARTA - Bank Indonesia (BI) reports that Indonesia's economic growth remains good and needs to be encouraged to comply with economic capacity.

BI Governor Perry Warjiyo said the latest developments showed that economic growth in the third quarter of 2025 was supported by an increase in exports in anticipation of the imposition of US reciprocal tariffs, especially in palm oil (CPO) and steel commodities.

Meanwhile, he explained that domestic demand still needs to be strengthened so that it can increase household consumption and investment.

Perry added that Government spending contributed to strengthening domestic demand and economic growth in the third quarter of 2025.

Meanwhile, based on the Business Field (LU), economic growth is driven by the performance of the production of LU Agricultural, LU Processing, and LU Trading industries which remain good.

Perry conveyed that spatially, the growth of the Java and Sumatra regions is predicted to be better than the forecast driven by the LU of the Agricultural Processing and LU Industry.

"In the whole second semester of 2025, economic growth is predicted to improve in line with the implementation of the Government's priority projects related to the 2025 Government's Food, Energy, Defense and Security and Economic Policy Packages, including social assistance which will be distributed in the fourth quarter of 2025," he explained at a press conference, Wednesday, October 22.

He added that Bank Indonesia will also continue to strengthen the policy mix through strengthening the mix of monetary, macroprudential, and payment systems in synergy with fiscal stimulus policies and the real sector of the Government to encourage national economic growth.

According to him, with these developments, overall economic growth in 2025 will be slightly above the midpoint of the range of 4.6 percent to 5.4 percent and increase in 2026.