Purbaya: The 2025 Economic Slowdown Is Not Because It Is Global But Mismanaged

Minister of Finance Purbaya Yudhi Sadive (Photo: Doc. VOI)

JAKARTA - Minister of Finance Purbaya Yudhi Sadive emphasized that Indonesia's economic slowdown during January 'August 2025 was not caused by global factors.

According to him, the weakening was mostly triggered by domestic management errors, which have now been corrected.

"So if you look at it from here, the slowdown in our economy as long as maybe the first 8 months of this year is not just global. Maybe it's not because it's global, maybe because of the mismanagement inside that we have fixed," he said in a working meeting with Commission XI DPR RI, Thursday, November 27.

He explained that the Indonesian economy in the third quarter of 2025 grew 5.04 percent on an annual basis (yoy).

According to him, this performance was supported by domestic demand, strong exports, solid investment, and the increase in government spending after the previous two quarters recorded negative growth which helped reduce the economy.

"The government's consumption grew 5.49 percent in line with the acceleration of government spending in the third quarter which grew high and will continue to accelerate in the fourth quarter. If we look at government spending, it appears that the first quarter contracted 1.37 percent, in the second quarter it was still minus 0.33 percent, in the third quarter it grew positively 5.5 percent," he said.

He added that the slow pace of government spending in the first two quarters of this year was one of the factors in weakening the economy. However, the government has made improvements so that in the first quarter of 2026 growth can be maintained again.

"We will prevent late spending from the government so that the economy will remain strong," he said.

Purbaya also said that Indonesia's trade balance surplus in January 'September 2025 remained solid, reaching 33.48 billion US dollars or grew about 50.09 percent on an annual basis, with a monthly surplus of 4.34 billion US dollars. This extends Indonesia's surplus trend to 65 consecutive months.

"When viewed from here, even though the world economy is experiencing uncertain turmoil, it seems that the influence on our exports and our trade balance is not significant, it tends to be positive. This can be seen from the growth in trade balance which is 50.09 percent," he explained.

With various improvement steps, such as placing government funds in banks and providing stimulus, Purbaya is optimistic that the Indonesian economy can grow 5.6 percent to 5.7 percent in the fourth quarter of 2025 and reach 5.2 percent for the whole year.