Indonesia Continues to Record Positive Growth, Public Must Be Aware of Economic Weakening Narrative
By Andini Setyaningsih )*
The Indonesian economy again showed solid performance in the first quarter of 2025, recording growth of 4.87 percent (yoy). This achievement places Indonesia as the country with the second highest economic growth among the G20 member countries, only below China which grew by 5.4 percent. This ranking is proof that the national economic fundamentals remain well maintained amid ongoing global uncertainty.
The Coordinating Minister for Economic Affairs, Airlangga Hartarto, emphasized that Indonesia’s position as a country with high economic growth in the G20 is a positive signal that must continue to be maintained. In fact, Indonesia’s growth has succeeded in surpassing other major countries such as Malaysia (4.4 percent), Singapore (3.3 percent), and Spain (2.9 percent). Airlangga is optimistic that this momentum will continue in the following quarters as the government budget realization begins.
This optimism is also reinforced by data from the Central Statistics Agency (BPS). Head of BPS, Amalia Adininggar Widyasanti, revealed that the manufacturing industry sector is the largest contributor to the Gross Domestic Product (GDP) structure in terms of business fields, with a growth of 4.55 percent and a contribution of 19.25 percent to the total GDP in the first quarter of 2025. The growth of this sector is driven by increased domestic and foreign demand.
Amalia further explained that the food and beverage industry recorded significant growth of 6.04 percent, mainly due to high demand during the month of Ramadan and Eid al-Fitr. Meanwhile, the basic metal industry experienced a spike in growth of up to 14.47 percent along with increasing global demand for commodities such as iron and steel. Even the leather, leather goods, and footwear industries grew by 6.95 percent, driven by increased exports and domestic consumption.
In addition to the industrial sector, the agricultural sector is also a major driver of national economic growth. According to Amalia, this sector grew the highest, namely 10.52 percent, with a contribution of 12.66 percent to GDP in the first quarter of 2025. This surge was triggered by the rice and corn harvest and the increasing demand for food during the festive season. The livestock sub-sector also recorded significant growth of 8.83 percent, driven by demand for meat and eggs.
The transportation and warehousing sector recorded growth of 9.01 percent and contributed 8.99 percent to the economy. This increase is inseparable from the increase in public mobility during the New Year, Nyepi, and Eid al-Fitr holidays, as well as the increasing activity of delivery and courier services. Meanwhile, the trade sector grew 5.03 percent and the accommodation and food and beverage sector grew 5.75 percent. Although the accommodation sector experienced a slight contraction due to the decline in room occupancy rates, the food and beverage sector continued to grow high by 7.21 percent.
Although economic data shows a positive trend, global challenges must still be anticipated. Deputy for Macro Planning and Development of Bappenas, Eka Chandra Buana, said that the target for national economic growth in 2026 is set between 5.8 percent and 6.3 percent. However, he also warned of the potential risk of a slowdown due to external shocks. Therefore, he emphasized the importance of maintaining external stability by strengthening the national balance of payments and controlling the current account deficit.
In this context, the government is targeting growth in public consumption in the range of 5.5 percent to 5.8 percent, government consumption between 6.8 percent to 8 percent, and investment between 6.2 percent to 7.2 percent. For the international trade sector, the industrialization strategy will continue to be encouraged so that Indonesia can increase exports of medium to high-tech products. The goal is to keep the balance of payments in surplus with foreign exchange reserves reaching USD 171 billion, which is enough to finance six months of imports.
In the midst of these positive achievements, the public must remain vigilant against misleading narratives regarding the condition of the national economy. Not a few parties deliberately spread false information to create the perception that the Indonesian economy is weakening. Narratives like this can disrupt the psychological stability of the public and market confidence, even though empirical data shows the opposite.
It should be remembered that public sentiment and perceptions of the economy greatly influence market dynamics and investment. Therefore, the public needs to be wise in responding to economic information, especially that circulating on social media. The government has worked hard to maintain macroeconomic stability, encourage inclusive sectoral growth, and ensure the distribution of development results is even across all regions, including the Eastern and Western Regions of Indonesia.
Communitymust be part of the national economic recovery and transformation process by strengthening domestic consumption, supporting domestic products, and remaining optimistic about future growth prospects. The government also continues to open up space for community participation through inclusive development programs, so that the benefits of growth are not only felt by large business actors, but also by MSMEs and the community.
With synergy between government policies, the performance of strategic sectors, and active community participation, Indonesia has a great opportunity to continue to record strong and sustainable economic growth. The narrative of economic weakness must be countered with literacy and facts, not with fear and provocation.
)* the author is an observer of economic policy
