Entrepreneurs Applaud Q2 Economic Growth Reaching 5.12%

Jakarta: The Indonesian Chamber of Commerce and Industry (Kadin) commends the government's hard work, resulting in higher economic growth in the second quarter of 2025 than in the first quarter of 2025. In fact, this economic growth is far above market expectations.

Indonesia's economic growth rate in the second quarter of 2025 year-on-year (yoy) reached 5.12 percent, up from 4.87 percent in the first quarter of 2025. Previously, market participants had estimated that economic growth in the second quarter of 2025 would only reach a maximum of 4.50 percent.

"The Indonesian Chamber of Commerce and Industry (Kadin) appreciates the government's hard work, which has yielded results. This achievement also provides optimism for business people. This is a special gift to all Indonesians ahead of Indonesia's 80th Independence Day on August 17, 2025," said Anindya Novyan Bakrie, Chairman of the Indonesian Chamber of Commerce and Industry (Kadin), in Jakarta, as quoted on Wednesday, August 6, 2025.

As reported by the Central Statistics Agency (BPS), Indonesia's economic growth in the first half of 2025 was recorded at 4.99 percent. This achievement was supported by economic growth in the first quarter of 4.87 percent and economic growth in the second quarter of 5.12 percent.

Although lower than the first half of 2024, which reached 5.08 percent, Anindya assessed that economic growth in the first half of 2025 was quite good and provides optimism for business people.

Government policies boost the economy in the second quarter

Anindya mentioned several steps taken by the government, resulting in better economic growth in the second quarter of 2025 compared to the previous period.

First, the government has begun to loosen spending restrictions. In the first quarter of 2025, government spending growth contracted by around 2.9 percent year-on-year (yoy). However, in the second quarter of 2025, there was a gradual easing, resulting in a contraction of only 0.33 percent.

Second, Anin continued, investment activity has begun to show results. The rate of investment growth, or gross fixed capital formation (PMTB), increased by 6.99 percent, far exceeding economic growth. In the first quarter of 2025, investment only grew by 2.12 percent year-on-year (yoy).

"This is the result of the government's hard work in attracting investment and facilitating business," he explained.

Third, household consumption grew 2.64 percent annually, compared to minus 4.89 percent in the previous quarter. This situation is quite encouraging, as private consumption is starting to grow, albeit below economic growth.

Fourth, despite the reciprocal tariffs imposed by US President Donald Trump, exports of goods and services in the first quarter of 2025 could grow by 2.43 percent year-on-year (yoy), a significant increase compared to the previous period's negative growth of 6.78 percent.

"Like investment, the government is placing significant emphasis on efforts to increase exports, particularly by seeking new markets and elegantly negotiating tariffs and non-tariff barriers with existing trading partners," said Anin.

Fifth, Anin believes the manufacturing industry is an engine of economic growth. In the second quarter, the manufacturing sector grew 5.88 percent, exceeding the economic growth rate and making the largest contribution to growth.

Sixth, several government quick-win programs have begun to bear fruit. Although only recently launched, government work programs have already had an impact on boosting public purchasing power and driving economic growth.

"Looking at several government work programs, including quick-win programs, the Indonesian Chamber of Commerce and Industry (Kadin) is optimistic that the Indonesian economy will slowly grow towards eight percent," he said.