Indonesia’s Economy Grows 5.11% in 2025, Driven by Consumption and Investment Surge
Jakarta, The Gulf Observer: Indonesia’s economy grew 5.11 percent year-on-year in 2025, driven primarily by household consumption and gross fixed capital formation (GFCF), according to Statistics Indonesia (BPS) on Thursday.
BPS head Amalia Adininggar Widyasanti attributed the growth to increased public mobility, which boosted spending on food and beverages, transportation, communication, and capital goods such as machinery and equipment.
At constant prices, Indonesia’s gross domestic product (GDP) reached Rp13,580.5 trillion (approximately US$805.5 billion), while at current prices, GDP stood at Rp23,821.1 trillion.
Household consumption remained the largest driver of growth, contributing 2.62 percentage points. Consumption expanded 4.98 percent in 2025, with restaurants and hotels recording the highest growth at 6.38 percent, reflecting stronger tourism activity during the year-end holiday season.
GFCF was the second-largest contributor, accounting for 1.58 percentage points. Overall, GFCF increased 5.09 percent, led by machinery and equipment, which surged 17.99 percent due to higher imports of capital goods and increased domestic production of industrial machinery.
Indonesia’s exports grew 7.03 percent, supported by higher shipments of non-oil and gas commodities and services. Key commodities contributing to export growth included animal and vegetable fats and oils, iron and steel, electrical machinery, and vehicles and parts.
By expenditure, household consumption made up the largest share of GDP at 53.88 percent, followed by GFCF at 28.77 percent, and exports at 22.85 percent.
On the production side, the manufacturing sector was the top contributor to growth, adding 1.07 percentage points, with a 5.30 percent expansion. Growth in manufacturing was supported by export-oriented industries, including crude palm oil and base metals, as well as increased output in food crops, livestock, and fisheries.
In the fourth quarter of 2025, Indonesia’s economy grew 0.86 percent quarter-on-quarter, signaling sustained momentum heading into 2026.
