Indonesia’s Economy Grows 5.04% in the Third Quarter of 2025

Daftarsbmptn.com – Indonesia’s economic growth slowed in the third quarter of 2025. The government was asked to increase the use of the budget to achieve higher economic growth by the end of 2025.

The Central Statistics Agency (BPS) recorded gross domestic product (GDP) growth in the third quarter of 2025 at 5.04% year-on-year (YoY). This figure is lower than the 5.12% YoY growth in the second quarter of 2025.

On a quarterly basis, Indonesia’s economic growth in the third quarter of 2025 reached 1.43%. This figure also slowed compared to the 4.04% quarter-on-quarter (QtQ) growth in the second quarter of 2025.

Economic growth in the third quarter is typically lower than the second quarter. In the third quarter of 2024, Indonesia’s economic growth was 4.95% year-on-year after increasing 5.05% in the second quarter.

In terms of value, BPS recorded Indonesia’s Gross Domestic Product (GDP) in the third quarter of 2025 at constant prices reaching IDR 3,444.8 trillion, up from IDR 3,279.5 trillion in the same period the previous year.

“The Indonesian economy, based on the size of its gross domestic product (GDP) in the third quarter of 2025 at current prices (ADHB), was IDR 6,060.0 trillion, and at constant prices (ADHK) IDR 3,444.8 trillion,” said the Deputy for Balance Sheet and Statistical Analysis at BPS in an official statement.

Finance Minister Purbaya Yudhi Sadewa previously projected that the economy would experience a slowdown in the third quarter of 2025. However, the figure would still be around 5%.

Purbaya estimated that economic growth in the third quarter of 2025 would weaken slightly, partly due to the massive demonstrations that occurred in August 2025. Nevertheless, he was optimistic that the economy would remain at the 5% level.

Boosting Government Spending

GREAT Institute economic researcher Perdana Wahyu Santosa stated that Indonesia’s economic growth in the third quarter of 2025 was driven by government spending, which began to accelerate at the end of the year. “The 5.04% growth was supported by government spending that began to accelerate at the end of the year,” Perdana said in an official statement on Wednesday (November 5, 2025).

Prima added that this 5.04% economic growth is quite good, considering the still-uncertain global economic challenges. “This 5.04% economic growth is already good, especially since Finance Minister Purbaya Yudi Sadewa has only been in office for two months. This is certainly a good foundation,” he added.

Prima also views manufacturing performance as one of the pillars of economic resilience in the third quarter, but with one caveat. “Our manufacturing sector has proven to be quite solid, remaining expansive above 50 throughout the last three months. This is an important foundation,” Perdana Wahyu Santosa said on Wednesday (November 5, 2025).

“Domestic demand remains the main factor keeping the manufacturing sector in an expansionary phase. This is important to maintain amidst global uncertainty so that the growth target in the fourth quarter can be even higher,” he added.

This economic growth is also in line with projections from several other institutions. Danamon projects economic growth of 5.02%, while Bloomberg projects 4.8%.

Prima, who is also the Dean of the Faculty of Economics at YARSI University, emphasized that although economic growth has declined slightly, it is still at 5%. This requires attention to ensure even better growth next year.

For the end of this year, the government needs to further encourage the use of the spending budget. The realization of central and regional government spending, which is still low, must be further optimized to ensure strong economic growth.

The Ministry of Finance (Kemenkeu) reported that realized central government spending as of early October 2025 had only reached IDR 1,481.7 trillion. This amount is only around 55% of the total central government spending ceiling, which consists of spending by Ministries/Institutions (K/L) and non-K/L, amounting to IDR 2,663.4 trillion.

“Thus, even though growth has declined slightly and is still at 5%, this needs to be addressed so that growth in the fourth quarter of 2025 can improve even further, in line with Purbaya’s projection of 5.5%,” Perdana explained.