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Indonesian Economic Projections For The First Quarter Of 2025 From Airlangga & Sri Mulyani

The Central Statistics Agency (BPS) will release Indonesia's economic growth figures measured by gross domestic product (GDP) this afternoon, Tuesday (5/5/2025). Several economists estimate that Indonesia's economic growth will not reach 5% in the first quarter of 2025. 

Market consensus collected by CNBC Indonesia from 14 institutions estimates that economic growth will reach 4.94% (year on year/yoy) and contract 0.9% compared to the previous quarter (quarter to quarter/qtq) in the first quarter of 2025. 

Meanwhile, Coordinating Minister for the Economy Airlangga Hartarto gave a signal that the Indonesian economy would not reach 5% when asked by the media crew. However, he still believes that the Indonesian economy will still grow close to 5%. 

"Yes, of course, if there is a rounding in mathematics [to 5%]," he told the media crew at the Coordinating Ministry for the Economy office, last Friday (2/5/2025). Meanwhile, Finance Minister Sri Mulyani Indrawati previously revealed that there are several factors that will support economic growth. "This year, in the first quarter, BPS has not issued it. We will see several factors that support economic growth," Sri Mulyani said in the APBN KITA press conference last week. 

Sri Mulyani saw one of the seasonal factors that affect economic indicators, namely Ramadan and Eid al-Fitr. She also remains optimistic that Indonesia's economic growth will reach 5%, as in 2024, which was 5.03%. Meanwhile, a poll conducted by Reuters also showed that the economy is likely to grow 4.91% in the first quarter of 2025, slightly below the 5.02% expansion recorded in the fourth quarter of last year. 

"We expect private consumption growth to slow but still contribute half of the first quarter's headline growth rate. Exports will contribute less than before, as Indonesia's main trading partner, China, is grappling with a weak economy and rising geopolitical tensions," said Jeemin Bang, Moody's Economist, quoted from Reuters. For the record, consumption contributes around 53.71% to total GDP so that the rate of consumption greatly determines Indonesia's economic growth. Bank Mandiri reported that household consumption growth is expected to weaken to below 4.9% (yoy) in the first quarter of 2025, from the previous 5.0% (yoy) in the fourth quarter of 2024. This reflects the tendency of people to spend more carefully, because part of their income is allocated for emergency savings. The amount of Third Party Funds (DPK) in the form of individual savings actually increased significantly in March 2025 or during Ramadan and approaching Eid al-Fitr. 

The increase in the amount of savings during Ramadan is considered anomalous considering that people usually drain their savings during Ramadan due to high consumption. For the record, Ramadan falls on March 1, 2025 and ends on March 30, while Eid al-Fitr falls on March 31, 2025. Based on CNBC Indonesia Research's monitoring, as of March 2025, the growth of personal savings deposits was 6.4% year on year/yoy or even higher than the same period in the previous year which only grew by 5.7% yoy. The growth of personal savings deposits in March 2025 was also the highest since November 2022 or around the last 2.5 years. 

Tag: BPS Central Statistics Agency GDP Sri Mulyani