Indonesia Maintains 5% Growth, Becomes Model for ASEAN Economies

Jakarta: Coordinating Minister for Economic Affairs Airlangga Hartarto stated that Indonesia has managed to sustain economic growth at around five percent over the past decades, while no other country has consistently achieved such growth at that level.

“In ASEAN, we are the leader, and ASEAN leaders always look to Indonesia, what Indonesia is doing, making Indonesia a reference point,” Airlangga said at the Coordinating Ministry for Economic Affairs office on Saturday, August 23, 2025.

Indonesia’s economy grew by 5.12 percent in the second quarter of 2025. The growth was supported by several factors. On the demand side, household consumption expanded by 4.97 percent, driven by controlled inflation at 2.18 percent.

Household spending increased, particularly in transportation, restaurants, and accommodation, in line with the school holiday season and major religious festivities, accompanied by government incentives such as discounted transportation fares and a reduced Value Added Tax (VAT).

“We managed to grow at 5.12 percent with relatively low inflation and strong investment, which reached IDR 942 trillion in the first half of 2025,” Airlangga noted.

He further revealed that the Indonesian government continues to pursue trade agreements to expand market access, including through BRICS, the Indonesia–European Union Comprehensive Economic Partnership Agreement (IEU-CEPA), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

“CPTPP will open the Mexican market. We know that one of Indonesia’s largest exports is automotive products, and under the agreement, Mexico provides only a limited quota of 70,000 units, while our automotive exports could exceed 400,000 units,” Airlangga explained.

He also mentioned that Indonesia is in the process of seeking membership in the Organisation for Economic Co-operation and Development (OECD).

“If we can achieve this within the next one to two years, our products will have wider market access, and we will be able to increase our capacity,” Airlangga said.

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