Airlangga Claims Prabowo's First Year Brings Stable Economic Growth Amid Uncertainty

October 16, 2025 | 05:13 pm

TEMPO.CO, Jakarta - Coordinating Minister for Economic Affairs Airlangga Hartarto said Indonesia’s economy continues to show resilience despite global uncertainty.

He cited the International Monetary Fund’s (IMF) revised projection, which raised Indonesia’s growth outlook from 4.8 percent to 4.9 percent this year.

“The IMF stated that amidst global uncertainty, Indonesia is a bright spot. Compared to many other countries facing economic turbulence, Indonesia continues to shine with an average growth rate of over 5 percent in the past seven years,” Airlangga said during an event marking one year of the Prabowo-Gibran administration at Hotel JS Luwansa, Jakarta, on Thursday, October 16, 2025.

Airlangga presented several macroeconomic indicators reflecting the performance of President Prabowo Subianto and Vice President Gibran Rakabuming Raka’s first year in office.

He noted that inflation remained stable at 2.65 percent, which is lower than in many other countries, and that the government successfully maintained the state budget deficit below the 3 percent threshold.

The former Golkar Party chairman also claimed that Indonesia’s debt ratio remains the lowest among G20 member states, standing below 40 percent of Gross Domestic Product (GDP).

“In addition, our sovereign credit ratings remain at investment grade, with stable outlooks from agencies such as Fitch and S&P,” he added.

However, economists expressed concerns about the sustainability of Indonesia’s fiscal position. Center of Economic and Law Studies (Celios) Executive Director Bhima Yudhistira said the country’s debt risk continues to rise and has become unhealthy.

“The projected economic growth of below 5 percent in 2025 is partly due to debt that no longer serves as leverage but has turned into a burden,” Bhima told Tempo on Thursday.

He pointed out that credit rating agencies, including S&P, have warned that the government’s debt interest payments should not exceed 15 percent of total state revenue. Yet, according to the 2026 State Budget Draft, the ratio of debt interest to revenue has already reached 19 percent.

Bhima urged the government to shift its development paradigm toward income-based growth. To achieve this, he said, authorities must focus on increasing the tax ratio by broadening the tax base rather than overburdening existing taxpayers.

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