Indonesia’s Economy Poised to Reach 5.2 Percent Growth

KBRN, Jakarta: Indonesian Coordinating Minister for Economic Affairs, Airlangga Hartarto, expressed confidence that the national economy will meet its growth target of 5.2 percent year-on-year (yoy) for 2025.

“The government is optimistic (5.2 percent),” said the Minister at the Presidential Palace complex in Jakarta on November 5, 2025.

He emphasized efforts to sustain economic momentum through the end of the year to ensure the target is reached. Minister Airlangga based this optimism on Indonesia’s third-quarter 2025 economic growth of 5.04 percent, which sustained a positive trend despite a slower growth rate compared to the prior quarter.

“The third quarter’s average growth is lower than the previous quarter. But 5.04 is a good figure because it remains above 5 percent,” he noted, as quoted from antaranews.com.

He highlighted encouraging indicators entering the fourth quarter, such as a stable Consumer Confidence Index at 115 and a Purchasing Managers’ Index (PMI) for manufacturing above 51, signaling increasing purchasing power.

“Purchasing power rises in Q4, proven by consumer confidence index at 115, then PMI (Purchsing Managers Index) at 51, above 51. Also, Mandiri spending index and BCA picked up,” Minister Airlangga remarked.

Increasing gold and jewelry prices further align with stronger consumption trends, reinforcing expectations of rising consumer demand towards the year-end.

Supporting data from the Central Bureau Statistic (BPS) revealed that Indonesia’s economy grew 5.04 percent yoy in Q3 2025, with household consumption contributing the largest share of 2.54 percent growth.

“When viewed from the sources of growth in the third quarter of 2025, household consumption remains the main or largest source of growth, namely 2.54 percent,” said the Deputy for Balance and Statistical Analysis of the Central Bureau Statistic (BPS), Moh. Edy Mahmud, during a press conference in Jakarta on Wednesday, November 5, 2025.

In addition, net exports contributed 2.15 percent growth, while gross fixed capital formation (PMTB) accounted for 1.59 percent. Household consumption represented 53.14 percent of Gross Domestic Product (GDP) structure, followed by Gross Fixed Capital Formation (GFCF) at 29.09 percent and exports at 23.64 percent.

Year-on-year household consumption growth reached 4.89 percent. This increase was driven by rising transport and communication activities, as well as growing demand in restaurants and hotels, reflecting enhanced population mobility and domestic tourism.

This robust combination of consumption, investment, and trade underpins the government’s optimism in meeting the 5.2 percent growth target for 2025. ***