Indonesia Economic Outlook 2025: Secular Stagnation
Indonesia’s economic growth remains stable, with GDP projected to grow between 5.00% and 5.05% in 2024 and 5.0% to 5.1% in 2025. However, this consistent growth rate of around 5% since 2014, excluding the COVID-19 period, suggests a risk of secular stagnation.
Without significant structural reforms, Indonesia’s economy may continue to rely on seasonal factors to sustain its momentum. Household consumption, which accounts for 53% of total economic activity, grew by 4.93% year-over-year, driven by national holidays.
Meanwhile, inflation fell to 1.84% in September 2024, its lowest level since the pandemic. Foreign Direct Investment (FDI) grew 18.6%, while the Rupiah depreciated by 2.91% due to geopolitical uncertainty. To achieve higher growth, Indonesia must pursue structural transformation to enhance productivity and reduce dependence on external conditions.