Indonesia Macro Update - GDP Growth 06 May 2025
KBVS MACRO UPDATE
Tuesday, 6 May 2025
1Q25 GDP Growth Slowed To 4.87% Amid Constrained Fiscal Conditions
As anticipated, Indonesia’s economic growth moderated in the 1Q25, recording -0.98% qtq or 4.87% YoY. From the expenditure side, the main drag on growth stemmed from a -1.38% YoY contraction in government expenditure. On a more positive note, investment growth provided a key support pillar, with combined domestic and foreign direct investment rising by 15.87% YoY. On the production side, sectoral dynamics were mixed.
Looking ahead, revenue performance and budget reallocation efforts will be critical in revitalizing growth from the demand side. We also hope to see greater investment channeled into labor-intensive industries, which would help reduce consumer caution and support a rebound in spending in 2Q25 and beyond.
Regards,
KBVS Research Team