Indonesia Economy Seen Hitting 2025 Growth Target

Indonesia’s GDP advanced 5.39% yoy in Q4 2025, accelerating from 5.04% in Q3 and surpassing market expectations of 5.01%. It was the strongest yearly growth since Q3 2022, boosted by solid private consumption (5.11% vs 4.89% in Q3) on continued government support measures and lower borrowing costs, even as government spending slowed (4.55% vs 5.66%). Also, fixed investment gained traction (6.12% vs 5.04%). However, net trade was less supportive, with export growth sharply easing (3.25% vs 9.14%) while imports picked up (3.96% vs 0.86%). By sector, output quickened in agriculture, forestry and fishing (5.14% vs 4.93%), wholesale/retail trade (6.07% vs 5.46%), transport and warehousing (8.98% vs 8.62%), and finance and insurance (7.92% vs 0.77%). For the full year, GDP rose 5.11%, below the government’s 5.2% target, reflecting the impact of natural disasters in three provinces, though still the strongest annual growth in three years. For 2026, the economy is expected to grow by 5.4%.

Indonesia’s economy is expected to have met its 5.2% growth target for 2025 despite flood-related damage late last year, with economic momentum seen strengthening in the fourth quarter, Finance Minister Purbaya Yudhi Sadewa said on Tuesday. Official data showed GDP growth eased to 5.04% year on year in Q3 from 5.12% previously, which had marked the fastest pace since mid-2023. Fourth-quarter figures are scheduled for release next week, on February 5. For this year, the government kept its 2026 growth target unchanged at 5.4%.

Indonesia’s GDP expanded 5.04% yoy in Q3 2025, broadly matching market expectations of 5.0% but easing slightly from 5.12% in Q2, the steepest growth since Q2 2023. The moderation was mainly driven by softer private consumption (4.89% vs 4.97% in Q2) and easing fixed investment growth (5.04% vs 6.99%). Exports slowed slightly (9.91% vs 10.95%), reflecting persistent global trade uncertainty, while import growth deteriorated (1.18% vs 11.48%), pressured by weaker purchasing power and depreciating rupiah. Still, government spending rebounded strongly (5.49% vs -0.33%), helping to cushion overall growth. By sector, output growth softened in manufacturing (5.54% vs 5.68%), construction (4.21% vs 4.98%), and finance & insurance (0.77% vs 3.2%), while mining activity contracted (-1.98% vs 2.03%). For 2025, the government maintained its GDP growth target at 5.2%, supported by fiscal prudence, expectations of further monetary easing by the central bank, and relief from lower U.S. tariffs.