Indonesia’s economic trajectory is set to outpace major global players, with Coordinating Minister for Economic Affairs, Airlangga Hartarto, recently declaring that Indonesia’s economic growth for 2025 is projected to exceed that of several G20 nations, including economic powerhouses like China and the European Union.
This optimistic outlook is firmly grounded in data from the Central Statistics Agency (BPS), which reported a robust 5.39 percent growth in Indonesia’s economy for the fourth quarter of 2025—the highest since the onset of the COVID-19 pandemic. For the entire year 2025, the national economy expanded by an impressive 5.11 percent. During the 2026 Annual Financial Services Industry Meeting, Airlangga highlighted these achievements, stating, “This growth is higher than China’s 5 percent, Saudi Arabia’s 4.5 percent, and significantly surpasses the EU’s mere 1.5 percent expansion,” as quoted on Friday (February 6).
The robust Indonesian economic growth, Airlangga explained, was primarily underpinned by consistently strong domestic consumption. This vital sector expanded by 5.11 percent in the fourth quarter of 2025 and maintained a solid 4.98 percent growth throughout the full year 2025. This surge in consumer spending was notably fueled by targeted social assistance programs (bansos) and economic stimuli disbursed towards the end of last year, effectively boosting household purchasing power.
Beyond consumption, the economy also received substantial impetus from escalating investment, which recorded a healthy 6.12 percent growth. This was further augmented by an accelerated government spending spree, expanding by a remarkable 44.2 percent, significantly bolstering demand and accelerating overall economic activity. Meanwhile, the external sector demonstrated resilience, with the export and import of goods and services growing by 7.03 percent in Q4 2025 and achieving an annual increase of 4.77 percent for the full year.
This comprehensive economic expansion was evident across nearly all sectors. The manufacturing industry saw a 5.4 percent increase, trade grew by 6.07 percent, and transportation and warehousing surged by 8.98 percent. The agricultural sector contributed a 5.14 percent rise, while other dynamic sectors, including tourism, accommodation, and food and beverages, recorded an impressive 7.15 percent growth, underscoring the diverse drivers of the nation’s prosperity.
Amidst this impressive growth, Indonesia’s macroeconomic fundamentals have remained robust and well-managed. The inflation rate, for instance, was contained at 2.92 percent in December 2025, although it saw a slight uptick to 3.55 percent in January 2026. Furthermore, Indonesia’s foreign exchange reserves stood strong at USD 156.5 billion, providing cover for approximately 6.2 months of imports—a healthy buffer for external stability. The fiscal deficit for 2025 was also prudently kept below 3 percent, settling at 2.92 percent, indicating responsible fiscal management. Concurrently, credit growth by December 2025 reached 9.6 percent, supported by Third Party Funds (DPK) totaling USD 13.83 billion, reflecting a vibrant financial sector.
A particularly reassuring aspect of Indonesia’s financial health is its national debt management. The debt-to-GDP ratio remained comfortably below 40 percent, falling within the 36-39 percent range, significantly beneath the statutory limit of 60 percent. Airlangga emphasized this stability, noting, “Approximately 70 percent of our debt is denominated in Rupiah, ensuring that our macro situation is relatively secure, particularly concerning corporate debt and hedging strategies.” This strategic approach safeguards the economy against currency fluctuations and external shocks.
Reinforcing his earlier statements, Minister Airlangga underscored Indonesia’s strong standing on the global stage, asserting that the nation ranks third in economic performance among all G20 countries, and second within ASEAN, trailing only Vietnam. Looking ahead, Indonesia’s economic outlook remains bright, with international organizations like the OECD, IMF, and World Bank consistently projecting growth between 4.8 and 5.1 percent for the current year, cementing Indonesia’s position as a resilient and rapidly advancing economy.