Jakarta — The downward revision of Indonesia’s economic growth forecast for 2025 by the OECD, from 4.9% to 4.7%, signals a serious warning about the strength and stability of the national economy. Ajib Hamdani, Economic Policy Analyst at Apindo, noted that signs of a slowdown have been visible since the beginning of the year, with first-quarter growth reaching only 4.87%, lower than the 5.11% recorded in the same period last year.
“If there is no government intervention, growth this year could fall below 4.87%,” Ajib said.
He identified four main factors overshadowing the current economic condition: weakened consumption due to layoffs, low tax revenues, external impacts from US tariffs, and investment that minimally absorbs labor.
“Since the beginning of the year, layoffs have reached over 70,000. Poverty is also high by World Bank standards,” he emphasized.
Ajib also pointed out that tax revenue realization in the first quarter was only 14.7% of the target, which is still far from the ideal achievement. Meanwhile, government spending efficiency actually adds further pressure on economic growth.
On the external front, US tariff policies have been hitting Indonesian exports since April.
“Demand from the United States has dropped sharply,” he added.
Meanwhile, current investments are mostly absorbed in capital-intensive sectors that create very few jobs.
“The impact on job creation is very minimal,” Ajib explained.
Nonetheless, he remains optimistic. Targeted direct cash assistance (BLT) programs and government spending could be key to maintaining growth above 5%.
He advised the government to implement the principle of “spending better,” focusing on job creation, food security, and energy in line with President Prabowo Subianto’s Asta Cita vision.
Further optimism was expressed by the South Sulawesi Chamber of Commerce and Industry (Kadin Sulawesi Selatan), which welcomed the economic stimulus package worth Rp24.44 trillion announced in June. Kadin Sulsel Chairman Andi Iwan Darmawan Aras said the stimulus has positive effects on public purchasing power, economic stability, MSME sectors, employment, and investor confidence.
“With social assistance, wage subsidies, and transportation discounts, household consumption will increase. This is important as it contributes more than 50% to GDP,” Andi Iwan explained.
He viewed the government’s quick and coordinated steps as a signal that the state is present and has the fiscal capacity to maintain economic momentum amid global pressures.
