Indonesia’s Q3 Economic Growth Holds Steady at 5% Amid Policy Support and Export Surge

Indonesia’s economy likely grew by a steady 5.00% in the third quarter of 2025, supported by strong household spending, investment, and a temporary boost in exports ahead of new U.S. tariffs, according to a Reuters poll. The survey of 22 economists conducted between October 27 and November 3 estimated GDP growth at 5.00% year-on-year, just below the 5.12% recorded in the previous quarter. On a quarterly basis, GDP growth likely slowed to 1.40% from 4.04% in Q2, with official figures set for release on Wednesday.

Economists noted that government-driven investment and consumer spending were key contributors. “Investment and consumption driven by policy support is really the name of the game in Q3,” said Adam Ahmad Samdin of Oxford Economics. Retail sales climbed 4.7% in July and 3.5% in August—well above the 1.0% average rise in Q2—fueled by a 24.44 trillion rupiah ($1.5 billion) fiscal stimulus introduced in June, which included cash handouts and transport subsidies.

However, larger consumer sectors such as automotive sales remained weak. Jeemin Bang from Moody’s Analytics suggested that Indonesia could benefit more if fiscal policies targeted structural issues like youth unemployment and sluggish real wage growth.

Exports also played a role in sustaining momentum. Companies accelerated shipments to the U.S. before a 19% tariff took effect on August 7, while imports dipped in July and August before rebounding in September. “Goods exports continued to benefit from front-loaded shipments, while import growth was modest,” noted Radhika Rao of DBS Bank.

Looking ahead, Indonesia’s economy is projected to grow 4.9% in 2025 and maintain around 5.0% in subsequent years. Still, risks persist as domestic demand softens and exports face challenges from China’s uneven recovery. Despite Bank Indonesia’s 150-basis-point rate cuts since September 2024—with another 50 basis points expected by March 2026—growth momentum remains cautious for Southeast Asia’s largest economy.