Statistics Indonesia (BPS) is scheduled to release second-quarter 2025 GDP figures on Aug. 5. Even ahead of the release, several international institutions have published their outlooks for 2025 and 2026.

Reports from the International Monetary Fund (IMF), the World Bank, the Asian Development Bank (ADB), and the Organisation for Economic Co-operation and Development (OECD) share a common thread: Indonesia’s economy is expected to slow in 2025 and 2026.

In its June 2025 Global Economic Prospects, the World Bank projects Indonesia’s growth at 4.7% in 2025, below the 5.0% achieved in 2024.

The forecast is also 0.4 percentage points lower than the Bank’s January projection of 5.1%.

The OECD’s June 2025 Economic Outlook likewise pegs 2025 growth at 4.7%. Similarly, the IMF’s July World Economic Outlook Update puts Indonesia’s 2025 growth at 4.8%, below 2024’s 5.0%.

The ADB offers a different view: its Asian Development Outlook (July 2025) forecasts Indonesia’s 2025 growth at 5.0%.

At a Financial System Stability Committee (KSSK) press conference on Monday (7/28/2025), Finance Minister Sri Mulyani said the government is closely monitoring growth forecasts for Indonesia and the global economy issued by international institutions.

Recent developments—ranging from tariff wars affecting global trade to geopolitical tensions—have prompted downward revisions to global growth projections.

In June 2025, the World Bank cut its 2025 global growth forecast (PPP weights) to 2.9% from 3.2%. The OECD’s June 2025 report also lowered its 2025 global growth outlook from 3.1% to 2.9%.

Indonesia’s Q2 2025 Growth

Finance Minister Sri Mulyani Indrawati said the Financial System Stability Committee (KSSK) remains optimistic that Indonesia’s economy will hold up in the second quarter of 2025, providing a base for full-year growth around 5.0%.

Positive household consumption and purchasing power, alongside resilient business activity, are being supported by the state budget (APBN) through its allocation, distribution, and stabilization functions.

Fiscal stimulus, acceleration of strategic programs, targeted support for priority sectors, and safeguards for vulnerable sectors will continue.

From the monetary side, BI Governor Perry Warjiyo said the central bank has lowered policy rates, eased liquidity, and increased macroprudential liquidity incentives to spur lending/financing to priority sectors.

“Going forward, the national policy mix response will continue to be strengthened to support economic growth,” Perry said.

Mohammad Faisal, Executive Director of the Center of Reform on Economics (CORE), projects Indonesia’s Q2 2025 growth to slow to 4.7%–4.8%, from 4.87% in Q1.

For full-year 2025, growth is expected at 4.6%–4.8%. He estimates a 19% reciprocal tariff would trim Indonesia’s export volume by roughly 2.65%, while competitiveness lags behind peers such as Vietnam.

With less than six months remaining, he said, the government cannot rely on business as usual to reach the 5% growth target.

“The government must effectively revive household consumption, investment, and government spending in the third and fourth quarters,” Faisal noted.

Teuku Riefky, a researcher at the Institute for Economic and Social Research (LPEM), Faculty of Economics and Business, University of Indonesia, forecasts Q2 growth at 4.78%–4.82% (around 4.80%), with full-year growth at 4.75%.

He said the economy’s growth capacity is being constrained by several factors: weakening purchasing power, a transition in government focus from the previous administration to the current one, heavy reliance on natural commodities, low productivity, and an unfriendly business climate.

Rising trade tensions—amid tariff threats by President Trump—could further worsen the domestic slowdown.

“Considering current conditions and the risk of intensifying external pressures from global trade disruptions, Indonesia’s economy could grow below 5% for the rest of the year,” Riefky said.

Indonesian Employers Association (Apindo) Chair Shinta W. Kamdani added that Indonesia’s manufacturing PMI in July 2025 indicates ongoing pressure on the business sector, particularly manufacturing. As purchasing by factory managers declines, production falls, reflecting softer demand.

“To achieve the Golden Indonesia 2045 vision with 8% growth, Indonesia needs major leaps in structural reform, higher human-capital quality, genuine deregulation, and a fair business ecosystem,” she said.