Indonesia Q1 GDP Growth Weakest in 3-1/2 Years

Indonesia’s economy grew by 4.87% yoy in Q1 of 2025, slightly below expectations of 4.91% and down from a 5.02% expansion in the previous quarter.

This was the slowest pace of growth since Q3 of 2021, weighed down by a decline in government spending (-1.38% vs 4.17% in Q4) due to a tighter budget, alongside softer rises in private consumption (4.89% vs 4.98%) and fixed investment (2.12% vs 5.03%).

On the external front, export growth moderated (6.78% from 7.63%), reflecting subdued global demand.

Import growth also slowed sharply to 3.96% from 10.36%, amid weaker domestic purchasing power.

Production-wise, output moderated for manufacturing (4.55% vs 4.89%), wholesale and retail trade (5.03% vs 5.19%), and real estate (2.94% vs 2.97%), while contracting for mining (-1.23% vs 3.95%).

For 2025, the government has maintained its GDP growth target at 5.2%.

However, Indonesia's Finance Minister recently said that new U.S.

tariffs could reduce GDP growth by 0.3 to 0.5 percentage points.