The Indonesian Central Bank (BI) has cut its projection for Indonesian economic growth in 2025 to be below 5.1 percent amid uncertainty due to the U.S.-China trade war.

BI Governor Perry Warjiyo said that the announcement on the U.S. reciprocal tariff policy in early April 2025, retaliatory measures by China and the possibility by a number of other countries have increased global economic fragmentation and will have an impact on domestic economy.

"Bank Indonesia estimates that Indonesia's economic growth in 2025 will be slightly below the midpoint of the 4.7-5.5 percent range," Perry said on Wednesday, April 23, 2025.

BI also lowered its global economic growth outlook from 3.2 percent to 2.9 percent. The largest decline in economic growth prospects has occurred in the U.S. and China in line with the impact of the tariff war between the two countries.

According to him, economic growth in other developed and developing countries will also slow down. This will have an impact on Indonesia's exports to trading partner countries, especially China.

Perry emphasized that various policies need to be strengthened to mitigate the impact of the declining prospects for global economic growth. Domestic demand needs to be encouraged, as well as export opportunities.

"Bank Indonesia continues to strengthen the mix of monetary and macroprudential policies to maintain stability and help drive economic growth, supported by the acceleration of the digitalization of the payment system," Perry said.

The International Monetary Fund (IMF) had earlier taken similar steps. This institution previously cut its projection for Indonesia's economic growth from 5.1 percent to 4.7 percent.

The IMF cut its overall global economic projection this year by 0.5 percent to 2.8 percent, while next year by 0.3 percent to 3 percent.

The institution also cut its forecast for economic growth in the U.S., China and most countries as the impact of U.S. tariffs has now reached its highest point in the last decade.