Indonesia Macro Update - GDP Growth 06 Aug 2025
KBVS MACRO UPDATE
Wednesday, 6 August 2025
WoW! 2Q25 Indonesia’s GDP Growth Was Remarkably Strong
Indonesia’s economy recorded a surprisingly strong performance in the 2Q25, growing by 4.04% QoQ and 5.12% YoY. This result is particularly encouraging given that several key leading indicators for 2Q25 had previously suggested a weaker outlook. Household consumption remained resilient, rising by 3.14% QoQ and 4.97% YoY; as well as the Gross Fixed Capital Formation, a proxy for investment, surged by 4.10% QoQ and 6.99% YoY; and the external sector also provided a strong boost, with Indonesia’s trade surplus increasing to USD9.39 bn during the quarter.
On the production side, several key sectors showed encouraging growth. Agriculture, Forestry, and Fisheries expanded by 13.53% QoQ and 1.65% YoY; Transportation and Warehousing rose by 6.58% QoQ and 8.52% YoY; then Accommodation and Food & Beverage services grew by 6.43% QoQ and 8.04% YoY. These improvements were likely supported by a sharp rise in mobility throughout 2Q25.
Looking ahead, several factors are expected to play a pivotal role in shaping the economic trajectory. The continued positive momentum in investment, coupled with the gradual easing of fiscal tightening. These dynamics may be further reinforced by the transmission effect of Bank Indonesia’s policy rate cuts in May and Jul, each by 25 bps. Moreover, the decline in cross-border distribution costs. Nonetheless, some downside risks remain.
Regards,
Fikri C Permana – KBVS Research Team