JAKARTA - Bank Permata economist Josua Pardede estimates that Indonesia's economic growth in the first quarter of 2025 is estimated to be at a moderate level of 4.91 percent on an annual basis or year on year (yoy), or weakening from the first quarter of 2024 which amounted to 5.11 percent (yoy).
According to him, this is in line with macroeconomic data, surveys of business actors and consumers, as well as indicators of the real sector that show domestic and external pressure.
Josua explained that household consumption, as the main support for the economy, in the first quarter of 2025, was estimated to grow 4.50 percent (yoy) or slowed down from 4.91 percent in the first quarter of 2024, driven by still maintained consumer optimism as reflected in the March 2025 Consumer Confidence Index (IKK) at 121.1, although it fell compared to February 2025 of 126.4.
"The Current Economic Condition Index (IKE) and the Consumer Expectation Index (IEK) above 100 indicate that people's confidence is still optimistic," he told VOI, May 4.
However, Josua explained that the weakening of the revenue index and the purchase of durable goods, especially from the lower middle income group, indicates that purchasing power is still there.
Based on data from the Retail Sales Survey, it also shows that annual growth (yoy) is still low in several major cities such as Jakarta minus 12.4 percent (yoy) and Bandung minus 6.3 percent (yoy).
SEE ALSO:
Meanwhile, he said government spending in the first quarter of 2025 was estimated to have contracted 2.88 percent (yoy), inversely proportional to the 20.44 percent spike in the first quarter of 20.44 percent.
According to him, this is reflected in the realization of the State Budget until March 2025 which reached 17.1 percent of the annual expenditure ceiling.
"The relatively low absorption of state spending is also a factor in weakening the aggregate of public demand and activities, although the government recorded a prime balance surplus of IDR 17.5 trillion," he explained.
Josua said that investment (PMTB) is estimated to grow 3.11 percent (yoy), relatively stable, supported by the realization of real investment which increased 15.9 percent (yoy) in the first quarter of 2025 to Rp465.2 trillion.
However, on a quarterly basis, investment growth is estimated to contract 6.50 percent (qtq), indicating investor caution, especially in terms of PMA which grew slower, namely 12.7 percent (yoy) compared to PMDN 19.1 percent (yoy).
According to him, external factors such as US trade rates and geopolitical tensions pose a risk to curb further expansion, even though the basic metal downstream sector is still actively attracting investment.
In addition, he said exports of goods and services grew strongly by 9.52 percent (yoy), continuing the positive trend thanks to downstreaming and additional-valued manufacturing exports. However, imports also rose 5.07 percent (yoy), reflecting fully recovered domestic demand.
Meanwhile, manufacturing PMIs are still in the expansionary zone (above 50) for key sectors such as food and beverages (53.81) and basic metals (53.65), but the textile, skin, and clothing sectors show contraction, consistent with pressure from US rates on these commodities.
From the business world side, the Business Activity Survey (SKDU) shows a slowdown in activity, as reflected in a declining net balance (SBT) and weakened conditions of retability and liquidity.
He explained that business actors also face challenges in accessing credit, with net balances of access perceptions decreasing to 3.61 from 4.81 in the previous quarter.
Overall, Josua projects growth in the first quarter of 2025 of 4.91 percent reflects a combination of consumption that is still solid but weakened, government spending is restrained, as well as investment and exports that have not fully recovered due to global pressure.
"External uncertainties, particularly US trade rates and global slowdown prospects, add to the risks to short-term outlooks. In this context, coordination of monetary and fiscal policy is key to maintaining stability and encouraging the recovery of domestic demand in the following quarters," he stressed.
The English, Chinese, Japanese, Arabic, and French versions are automatically generated by the AI. So there may still be inaccuracies in translating, please always see Indonesian as our main language. (system supported by DigitalSiber.id)
