Jakarta, Indonesia Sentinel — Indonesia’s Finance Minister Purbaya Yudhi Sadewa has commented on the World Bank’s latest projection, which raised Indonesia 2025 economic growth outlook to 4.8% from 4.7% previously.
While the upward revision reflects optimism for Southeast Asia’s largest economy, the figure remains below the government’s target of 5.2% growth for the year.
Purbaya acknowledged that growth in the third quarter of 2025 is likely to remain subdued but said the economy is expected to rebound strongly in the fourth quarter as the impact of several government policies takes effect.
“The third quarter will probably be slower due to the recent downturn, those public protests are actually an indication of a cooling economy,” Purbaya told reporters at the Shangri-La Hotel in Jakarta on Wednesday (October 8, 2025). “But the fourth quarter should see faster growth.”
He projected that Indonesia’s economy could expand by as much as 5.5% in the fourth quarter, helping offset the weaker performance in the first half of the year, when growth reached only 4.99%.
Purbaya’s optimism stems from early signs of recovery in bank lending, following the government’s injection of 200 trillion rupiah ($12.3 billion) into the banking system to stimulate liquidity and lending.
“Now, credit growth has risen from 8% to 11% at one of our state-owned banks,” he said. “I hope the same trend continues across the sector.”
He added, “It doesn’t matter if we’ve stumbled before, what’s important is the direction we’re heading. And I’m confident we’re moving upward.”
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Earlier this week, the World Bank raised its 2025 growth forecast for Indonesia to 4.8%, citing steady expansion across East Asia and the Pacific, according to its October 2025 East Asia and Pacific Economic Update.
The report noted that while growth in major economies such as China and Indonesia remains robust, hovering around 5% annually, which much of it is driven by government spending and state-led investment, which may not be sustainable in the long term.
“The Indonesian government’s current budget allocation focuses on subsidies for food, transportation, and energy, as well as state-driven investment aimed at boosting aggregate demand,” the report said.
However, the World Bank cautioned that both Indonesia and China need deeper structural reforms to sustain growth momentum. These include reducing non-tariff barriers in the services sector, deregulating industries, and streamlining business licensing processes, especially in Indonesia to create more productive jobs and enhance competitiveness.
(Raidi/Agung)
