Jayanty Nada Shofa & Arnoldus Kristianus, Jakarta – Indonesia's economy grew at a slower rate of 4.87 percent year-on-year (yoy) in the first quarter of 2025, official statistics showed on Monday.

This was the lowest Q1 growth that Indonesia had ever recorded over the past three years. The Southeast Asian country's economy expanded 5.11 percent yoy in the first three months of 2024. Growth in Q1 2022 and Q1 2023 had reached 5.02 percent yoy and 5.04 percent yoy, respectively, according to the Central Statistics Agency (BPS). The latest figures were worse than analysts' forecasts as economist Teuku Riefky set an estimate of 4.94 percent for Q1 2025.

BPS' chief Amalia Adininggar Widyasanti attributed the slower pace to the elections – something that was missing this year. In February 2024, Indonesia held the world's largest single-day election, which caused government spending to soar at the time.

"We had the elections in Q1 2024, but we did not have any this year. The lack of elections was among the reasons behind the 4.87 percent growth.... We are aware of how the government spending for the elections has always been relatively huge," Amalia said at a press briefing.

The Q1 2025 data also did not include the economic potential from Eid al-Fitr. This year, Eid fell on March 31 or right at the end of the first quarter. The Eid holidays lasted until April 7. In other words, the financial turnover from the much-anticipated long holidays would be reflected on the Q2 2025 reports, Amalia said.

BPS revealed that household consumption made up the lion's share in the Q1 2025 figures, contributing 2.61 percent. Followed by gross fixed capital formation (0.65 percent), net export (0.83 percent), and other factors (0.86 percent). Government consumption, however, gave a negative 0.08 percent growth over the same period. This gave Indonesia the final 4.87 percent growth.

Senior minister Airlangga Hartarto dismissed worries over Indonesia's economy following the BPS report. Airlangga claimed that Indonesia's growth was only second to China (5.4 percent) in the G20, alluding that Jakarta remained upbeat in its economy.

"We are growing at a faster rate compared to Malaysia's 4.4 percent, Singapore's 3.8 percent, and even Spain's 2.9 percent.... Within ASEAN, we are only slightly lower than Vietnam's," Airlangga said at a separate news conference.

Vietnam's gross domestic product rose 6.93 percent in the first quarter of 2025.

The press also asked Airlangga whether Indonesia was planning to revise its annual economic target following BPS announcements. The minister responded: "We will take a look at the developments in the following quarter, as government spending is set to pick up pace, so we can maintain this growth momentum."

Source: https://jakartaglobe.id/business/indonesias-q1-economic-growth-slows-to-487-pct