Bank Indonesia Trims 2025 Economic Forecast After Q1 Slowdown

Bank Indonesia now sees economic growth between 4.6 and 5.4 percent in 2025, down from the previous forecast of 4.7-5.5 percent, Governor Perry Warjiyo said on Wednesday. The minor change in the forecast comes after the Chinese economy grew at a slower rate in the January–March period than it did in the last quarter of 2024. It is because of weakening economies across the world that the central bank is making this call, according to its spokesperson.

The development of Indonesia’s economy is affected by the global economy, according to Warjiyo in a virtual news conference after a May Board of Governors Meeting. People spent more at home during holidays, investors contributed money to the market and large export orders from trading countries contributed to first-quarter economic growth. Warjiyo said he was sure growth would increase after the second quarter of 2025, explaining that joint work by Bank Indonesia and the government is crucial to support economic activities.

The adjustment follows the updates to earlier forecasts by worldwide organizations. Both the IMF and World Bank now agree that Indonesia is likely to grow by 4.7 percent in 2025, but they are also concerned about how U.S. trade rules could upset global business practices. Even with the central bank’s sober forecast, Finance Minister Sri Mulyani Indrawati is keeping the ambitious target of 5.3 percent growth for 2025 and long-term targets to hit 8 percent in 2029.