Panorama econòmic

Economic indicators

Indonesia is seen as a future economic giant. It is the largest economy in Southeast Asia and the world's seventh by purchasing power parity (IMF). The economy grew by 5.11% in 2025, slightly faster than the 5.03% growth in 2024. Economic activity was supported by household consumption and rising investment, which helped offset shrinking net exports, according to Statistics Indonesia. Growth ran at 5% across the first half of 2025 (data World Bank). For 2026 and 2027, the World Bank expects growth to settle at around 4.8%; however, the re-escalation of global trade disputes poses a challenge for the future, increasing business uncertainty.

After experiencing a widening of the budget deficit during the pandemic, authorities have intensified fiscal consolidation efforts. Indonesia's unaudited 2024 budget deficit was smaller than expected, at IDR 507.8 trillion (USD 31.38 billion), or 2.29% of GDP, compared to the earlier estimate of 2.7% of GDP. This was wider than 2023's deficit of 1.61%. The government ended 2024 with IDR 45.4 trillion in excess cash, which can help address the 2025 deficit projected at 2.53% of GDP. Revenues rose 2.1% to IDR 2,842.5 trillion, while total spending increased by 7.3% to IDR 3,350.3 trillion. The 2025 expenditure plan is IDR 3,621.3 trillion. A key challenge for 2025 is boosting revenues after the planned VAT increase was scrapped in favour of applying it only to luxury goods. According to the IMF, the country’s debt-to-GDP ratio saw a marginal increase in 2024, reaching 40.5% (from 39.6% one year earlier), but should remain stable over the forecast horizon amid nominal GDP growth. Inflation went down from 2.2% in 2024 to 1.9% in 2025, below the central bank’s target range, before climbing back to 3.19% in August 2026. While the bank cut rates in September, it has since paused rate changes due to financial market volatility and the rupiah's weakness.

The unemployment rate in Indonesia decreased from 3.4% to 3.2% in 2025, according to World Bank data, though youth unemployment remains high at 17.3%. The labour force participation rate increased to 70.6%, with female participation rising to 56.4%. However, real wages have stagnated, particularly in labour-intensive sectors, and the economy is not generating enough middle-class jobs. Indonesia has achieved enormous gains in poverty reduction, cutting the poverty rate by more than half since 1999, to approximately 8.5% of the population as of March 2025. While the average GDP per person (PPP) was estimated at USD 17,660 in 2025 by the World Bank, the country has still one of the fastest-rising inequality rates in the East Asia region according to the World Bank.

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