Global Institutions Predict Indonesia's 2025 Economic Growth May Fall Below 5%

TEMPO.CO, Jakarta - Several institutions have projected Indonesia's economic growth in 2025. Some estimate Indonesia's economic growth to be below 5 percent in 2025.

Previously, the Central Statistics Agency (BPS) reported that Indonesia's economic growth slowed in the first quarter of 2025. Indonesia's economic growth in the first quarter of 2025 was only 4.87 percent annually or year-on-year.

The Head of BPS, Amalia Adininggar Widyasanti, stated that Indonesia's economy based on the gross domestic product or GDP in the first quarter of 2025 at current prices was Rp5,665.9 trillion. Meanwhile, the GDP at constant prices was Rp 3,264.5 trillion.

Despite the slowdown, Finance Minister Sri Mulyani expressed optimism that economic growth would still reach 5 percent in 2025.

Here are the projections for Indonesia's economic growth from various international institutions:

International Monetary Fund (IMF)

The IMF forecasted that Indonesia’s economy would grow by 4.7 percent in both 2025 and 2026, a downgrade from its January estimate of 5.1 percent.

The projection, included in the April 2025 World Economic Outlook, also noted that emerging Asian economies, including ASEAN countries, were among the most affected by new U.S. tariffs.

World Bank

The World Bank projected Indonesia’s growth at 4.7 percent in 2025, 4.8 percent in 2026, and 5 percent in 2027.

In its April 2025 Macro Poverty Outlook, the bank highlighted improvements in poverty and unemployment figures but pointed out that the pace of middle-class job creation remained slow.

It also warned that global and domestic policy uncertainty could lead to capital outflows and pressure the rupiah, potentially affecting investment and growth.

Moody’s

Moody’s Investors Service projected steady economic growth for Indonesia, averaging around 5 percent in 2025 and 2026. The outlook was supported by strong household consumption, investment, and stable commodity exports.

However, Moody’s cautioned that global factors, such as trade tensions, could slow down growth. The agency also noted that while Indonesia’s debt burden remains manageable and relatively low, its fiscal position is challenged by a limited revenue base.

Bank Indonesia

Bank Indonesia estimated the country’s economic growth for 2025 would range between 4.7 and 5.5 percent.

One factor that could affect Indonesia's economic growth is the U.S. tariff policy, which has the potential to reduce Indonesia's exports to the United States and indirectly impact export demand from other trading partners, especially China.

Annisa Febiola, Anastasya Lavenia Y, and Yolanda Agne contributed to the writing of this article.

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