MACROECONOMIC ANALYSIS SERIES: Indonesia Economic Outlook Q1-2025 - Aiming for 8, Struggling at 5

Jahen F. Rezki (), Teuku Riefky (), Faradina Alifia Maizar (), Difa Fitriani (), Mervin Goklas Hamonangan (), Hardi Salim () and Alif Ihsan A Fahta ()
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Jahen F. Rezki: 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)
Faradina Alifia Maizar: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Difa Fitriani: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Mervin Goklas Hamonangan: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Hardi Salim: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Alif Ihsan A Fahta: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)

No 202501, LPEM FEBUI Quarterly Economic Outlook from LPEM, Faculty of Economics and Business, University of Indonesia

Abstract: Indonesia enters 2025 with a substantially weakening economic performance. Declining purchasing power, shrinking middle class, and prolonged deterioration in sectoral productivity send a clear signal of significant structural issues, as reflected in the growth figure throughout 2024. The third quarter of 2024 stood out as the only quarter in 2024 without a significant seasonal factor that drove economic activity. Only grew by 4.95% (y.o.y) in Q3-2024, Indonesia’s economic growth dipped below 5%, lower than 5.11% (y.o.y) in Q1-2024 and 5.05% (y.o.y) in Q2-2024. The latest GDP growth figure painted a bleak picture and further suggests a worrying structural problem that the Indonesian economy is currently incapable of reaching a 5% growth level without any seasonal driver. This is not a new phenomenon, as a similar occurrence also happened in 2023, in which Indonesia's economic growth only reached 4.94% (y.o.y) in the third quarter. After the passing of the homecoming period during Eid Al-Fitr and the school holiday season in the second quarter of 2024, various related economic sectors experienced a growth decline, such as the transportation and storage sector, business services sector, and accommodation and food and beverages activity.

Keywords: gdp; —; economic; quarterly; —; economic; outlook; —; inflation; —; macroeconomics (search for similar items in EconPapers)
Date: 2025-01, Revised 2025-01
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