Bank Indonesia (BI) projects that economic growth in 2025 will surpass the midpoint of its forecast range of 4.6% to 5.4% year on year (YoY). In fact, the figure is expected to potentially reach even higher levels.

According to BI Governor Perry Warjiyo, following the Board of Governors Meeting (RDG) held on August 19–20, the central bank foresees stronger economic performance in the second half of 2025. This projection is based on second-quarter growth, which reached 5.12% YoY—exceeding market expectations.

Furthermore, with a policy mix that includes interest rate cuts, liquidity expansion, macroprudential incentives, and accelerated digitalization—combined with several underlying economic drivers—BI expects full-year growth in 2025 to reach around 5.1% or possibly higher.

“Growth could reach about 5.1% or even more. That is why policy coordination and synergy between the government and Bank Indonesia will continue to be strengthened,” Perry stated at the announcement of the August 2025 RDG results on Wednesday, August 20, 2025.

Key growth drivers for the second half of 2025 include improving export performance, recovering government spending, and rising investment. Perry noted that exports will remain strong to multiple destinations, supported by the reduction of U.S. import tariffs from 32% to 19%.

“This particularly applies to mining exports, plantation commodities such as palm oil, and products related to agriculture and fisheries,” Perry explained.

Government spending, which recorded negative growth in Q2 2025, is also expected to rebound and stimulate domestic demand. Meanwhile, investment is projected to continue increasing, particularly in export-oriented sectors, transportation and warehousing, agricultural equipment industries, and several strategic projects.

For context, Statistics Indonesia (BPS) reported that Indonesia’s economy grew by 5.12% YoY in Q2 2025, exceeding most analysts’ and economists’ forecasts, and marking an improvement from Q1 2025 growth of 4.87% YoY.