MACROECONOMIC ANALYSIS SERIES: Indonesia Economic Outlook 2025 - Secular Stagnation

Jahen F. Rezki (), Syahda Sabrina, Nauli A. Desdiani, Teuku Riefky, Amalia Cesarina, Meila Husna, Faradina Alifia Maizar and Yoshua Caesar
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Jahen F. Rezki: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Syahda Sabrina: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Nauli A. Desdiani: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Teuku Riefky: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Amalia Cesarina: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Meila Husna: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Faradina Alifia Maizar: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Yoshua Caesar: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)

No 202404, LPEM FEBUI Quarterly Economic Outlook from LPEM, Faculty of Economics and Business, University of Indonesia

Abstract: The latest development of Indonesia’s economy might suggest the occurrence of secular stagnation. Having no new source of growth, Indonesia prolonged its long-term growth trend of around 5% since 2014 in the second quarter of 2024 (excluding the COVID-19 period). During the first half of 2024, Indonesia was not able to grow considerably beyond a 5% rate despite having two consecutive quarters with seasonal boosters. In Q1-2024, Indonesia held Presidential and legislative elections and had a Ramadhan period, while Ied Al-Fitr, religious and school holidays occurred in the second quarter of 2024. This phenomenon might suggest a more worrying condition as there might be a risk for Indonesia only to be able to grow below 5% without seasonal factors. Indonesia’s GDP grew slower from 5.11% (y.o.y) in Q1-2024 to 5.05% (y.o.y) in Q2-2024. As GoI’s spending significantly decelerated from the first quarter to the second quarter of 2024 after the effort to speed up infrastructure completion projects and enhanced spending preceding the election period, Indonesia’s GDP growth declined. The dominance of government spending in the growth figure might verify the lethargic productivity of economic sectors in Indonesi

Keywords: gdp; —; economic; quarterly; —; economic; outlook; —; inflation; —; macroeconomics (search for similar items in EconPapers)
Date: 2024-04, Revised 2024-04
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