Statistics Indonesia (BPS) reveals that the country’s economy grew by 4.87 percent year-on-year (yoy) in the first quarter (Q1) of 2025, apparently the slowest growth pace since Q3 2021 and a decline from 5.11 percent in the same period last year.

The country’s gross domestic product (GDP) was recorded at Rp15,665.9 trillion (US$979 billion) in current prices and Rp3,634.5 trillion (US$227 billion) in constant prices. Despite seasonal boosts from Ramadan and Idul Fitri consumer spending, the Q1 performance was also lower than the 5.02 percent posted in Q4 2024.

“The slowdown is partly due to a contraction in government spending, which declined by 1.38 percent in the first quarter,” BPS chief Amalia Adininggar Widyasanti said on press conference on Monday, May 5, 2025.

In regional comparison, Indonesia’s economic growth still surpassed several key trading partners, including Malaysia (4.4 percent), Singapore (3.8 percent), the United States (2 percent), and South Korea, which saw a rare contraction of 0.1 percent.

However, Indonesia trailed behind Vietnam, which posted a robust 6.9 percent growth, and China at 5.4 percent.

Notably, many of these countries experienced improved annual growth rates compared to Q1 2024, unlike Indonesia. Vietnam accelerated from 6 to 6.9 percent, Malaysia from 4.2 to 4.4 percent, Singapore from 3.2 to 3.8 percent, and China from 5.3 to 5.4 percent.

Coordinating Minister for the Economy, Airlangga Hartarto, however downplayed the slowdown, emphasizing Indonesia’s relative resilience amid global uncertainty.

“Among G20 nations, Indonesia ranks second only to China,” Airlangga said on Monday, May 5, 2025, adding that the government remains optimistic about a stronger Q2, supported by a ramp-up in state budget execution.

Senior economic policymaker Luhut Binsar Pandjaitan echoed the sentiment, attributing the stagnation partly to historical patterns.

“The figures are not far from those under President Joko Widodo’s administration,” Luhut, who is also chairman of the National Economic Council (DEN), said while stressing the need to accelerate government spending.

The global economic outlook remains uncertain as trade tensions escalate under U.S. President Donald Trump's renewed tariff policies. Analysts warn that weakening demand from Indonesia’s trade partners could weigh further on export performance in the months ahead.