Indonesia’s economy expanded 5.04% year-on-year in the third quarter of 2025, slightly below the 5.12% recorded in the previous quarter, according to Statistics Indonesia (BPS). On a quarterly basis, the economy grew 1.43%, supported by resilient domestic demand and a rebound in exports. 

In nominal terms, the country’s gross domestic product (GDP) reached IDR 6,060 trillion (USD 362.53 billion), while GDP at constant 2010 prices stood at IDR 3,444.8 trillion. 

Household consumption, which accounts for over half of GDP, increased 4.89%, compared with 4.97% in the second quarter. Investment rose 5.04%, slowing from 6.99% in the previous period, while government spending grew 5.49% after a contraction earlier this year. 

Exports of goods and services recorded the highest growth among components, rising 9.91% year-on-year and 6.77% quarter-on-quarter. BPS Deputy Moh. Edy Mahmud said the increase was driven by higher exports of non-oil and gas commodities such as vegetable oil, steel, electrical machinery, and vehicles. Exports contributed 23.64% to total GDP, following household consumption (53.14%) and gross fixed capital formation (29.09%). 

The manufacturing sector contributed the most to growth, expanding 5.54% and adding 1.13% to GDP, while mining contracted due to lower coal demand and reduced copper output following a mudflow incident at Freeport Indonesia’s Grasberg mine in Papua. 

Retail sales rose 4.7% in July and 3.5% in August, supported by a IDR 24.44 trillion (USD 1.5 billion) fiscal stimulus introduced in June, which included cash handouts and transport subsidies. Another nearly USD 3 billion stimulus package has been prepared for the fourth quarter. 

Exports also benefited from companies front-loading shipments to the United States before a 19% tariff took effect on August 7. Imports declined in July and August before rebounding in September. 

Coordinating Minister for Economic Affairs Airlangga Hartarto said the government would intensify fourth-quarter efforts to achieve the 5.2% full-year target. “Our efforts in Q4 need to be further intensified so that the average figure of 5.2% can be achieved at year-end,” he said. 

Bank Indonesia has reduced interest rates by 150 basis points since September 2024 and paused its easing cycle last month. Analysts expect the central bank to keep rates steady while leaving room for further cuts. 

Cumulative growth from January to September 2025 stood at 5.01%.