Indonesia's Economic Growth Shows Signs of Recovery Amid Initial Slowdown

Finance Minister's Assessment of Economic Performance

Finance Minister Purbaya Yudhi Sadewa has attributed Indonesia's economic slowdown in the first eight months of 2025 to internal mismanagement rather than global economic factors. During a working meeting with Commission XI of the DPR, Purbaya stated that the economic growth slowdown was primarily due to internal issues that have since been addressed.

Third Quarter Economic Performance

The Indonesian economy showed positive signs in Q3 2025, growing 5.04% year-on-year. This growth was driven by several key factors including robust domestic demand and strong export performance. Additionally, investments remained resilient during this period, contributing to the overall economic growth.

Government Spending Recovery

Purbaya highlighted that government spending, which had been sluggish in the first two quarters of 2025, showed significant recovery in Q3. Government consumption grew by 5.49%, aligning with the acceleration of government expenditure during the quarter. The minister noted that government spending had contracted by 1.37% in Q1 and remained negative at 0.33% in Q2, before turning positive in Q3.

Future Economic Outlook

To prevent future economic slowdowns, Purbaya emphasized that the government is committed to maintaining a consistent spending pattern. The administration plans to ensure that government expenditure is executed more efficiently moving forward, thereby supporting sustained economic growth. Purbaya assured that measures are being taken to prevent delayed government spending, which should help maintain economic momentum into the next year.