Indonesia’s Q3 Growth Hits 5.04%, Finance Ministry Sees Momentum Will Build in Q4

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JAKARTA, Investortrust.id — Indonesia’s economy grew 5.04 percent year-on-year in the third quarter of 2025, showing steady momentum despite global headwinds. Finance Ministry Director General of Economic and Fiscal Strategy Febrio Nathan Kacaribu said the performance marks a crucial base for the government to accelerate growth further in the fourth quarter and into 2026.

“The fourth quarter of 2025 will be the real test. It is where we begin building the momentum to reach higher growth in 2026,” Febrio said during his keynote address at the Investortrust Economic Outlook 2026 seminar themed “2026, The Year of Expansion,” held at the Ritz Carlton Hotel, Jakarta, on Wednesday, Nov. 5, 2025.

He said the government remains confident that this year’s growth target of 5.2 percent is achievable, supported by resilient domestic consumption and investment. “With that, sentiment will continue to build, and the high growth in the fourth quarter will carry into the first quarter of 2026,” he said.

The Central Statistics Agency (Badan Pusat Statistik or BPS) reported that gross domestic product at current prices reached Rp 6,060 trillion in the third quarter, with Rp 3,444.8 trillion in constant prices. On a quarterly basis, GDP grew 1.43 percent, bringing cumulative growth for January–September 2025 to 5.01 percent.

Deputy Chief Statistician for National Accounts and Statistical Analysis Moh Edy Mahmud said that growth was mainly driven by five key sectors: manufacturing, agriculture, trade, construction, and mining, which together accounted for 65.02 percent of GDP. “The manufacturing industry contributed the largest portion to growth at 1.13 percentage points,” he said.

Household consumption, which makes up 53.14 percent of GDP, rose 4.89 percent year-on-year, reflecting stable domestic demand. Gross fixed capital formation (PMTB) contributed 29.09 percent and grew 5.04 percent, while government spending expanded 5.49 percent with a 7.17 percent share. Exports grew 9.91 percent, driven by higher non-oil and gas shipments and service exports.

“The data show that 82.23 percent of GDP in the third quarter of 2025 came from household consumption and investment,” Edy said. The education sector recorded the highest annual growth at 10.59 percent, fueled by the start of the new academic year and increased education spending.

To strengthen future momentum, Febrio said the government’s 2026 state budget strategy (APBN 2026) will emphasize faster disbursement. “In the first quarter of 2026, ministries and agencies with large spending allocations will be coordinated to realize early budget execution,” he said.

He added that visible progress is essential to sustaining private-sector trust. “Trust cannot be built on promises alone. Evidence must follow, and we will show that through action,” he said.

Febrio cautioned that despite domestic resilience, global challenges remain. “The war between Russia and Ukraine continues, the Middle East remains unstable, and other regions are showing signs of conflict. Some call this a ‘permacrisis,’” he said.

He added that global economic growth in 2026 is projected at around 2.9 percent, underscoring the need for Indonesia to seize opportunities amid uncertainty. “Even with these threats, we must look for openings—especially in the shifting dynamics between the United States and China,” he said.