Indonesia's Path to Developed Economy: Challenges and Strategies

Economic Growth Projections for Q4 2025

Finance Minister Purbaya Yudhi Sadewa has projected that Indonesia's economic growth for the fourth quarter of 2025 will reach between 5.6% and 5.7% ²

. To achieve this target, Purbaya is focusing on ensuring that government programs are implemented effectively. The minister's optimism is based on positive indicators from various economic sectors, including domestic consumption and investment growth ⁴

Source 4

https://finance.detik.com/bursa-dan-valas/d-8219898/purbaya-ungkap-syarat-ri-jadi-negara-maju-ekonomi-8-nggak-cukup

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Requirements for Becoming a Developed Nation

Purbaya emphasized that achieving double-digit economic growth for over a decade is crucial for Indonesia to become a developed nation ¹

. He acknowledged that while reaching 8% growth is a good start, it is insufficient for achieving developed country status. The minister's statement highlights the ambitious targets required for Indonesia's economic transformation.

Role of Expectations in Economic Growth

The Finance Minister also stressed the importance of creating positive economic expectations. Citing the work of economist Roger Farmer, Purbaya noted that positive expectations can significantly influence economic outcomes by encouraging business expansion and consumer spending ³

. This approach suggests that psychological factors play a crucial role in Indonesia's economic strategy.

Drivers of Current Economic Growth

Recent data shows that Indonesia's economic growth in Q3 2025 reached 5.04%, driven by several key factors ⁴

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• Domestic demand remained strong, with household consumption contributing 4.89% to GDP
• Export performance provided significant support
• Investment growth (PMTB) reached 5.04%, indicating business optimism
• Government spending played a crucial role in maintaining economic momentum

Challenges and Future Outlook

While current growth is positive, achieving double-digit growth will require substantial efforts across multiple sectors. The government faces the challenge of maintaining macroeconomic stability while implementing structural reforms to support higher growth trajectories.