ASEAN’s largest economy slows to lowest growth since Q3/2021

Official data released recently indicates that Indonesia's economic growth decelerated in Q1 due to weakened domestic consumption.

According to Indonesia’s Central Statistics Agency (BPS), the Southeast Asian nation's economy grew by 4.87% in the first three months of the year.

This marks the slowest growth pace since Q3/2021 and is lower than the 5.11% recorded in the same period last year.

Compared to Q4/2024, Indonesia’s GDP contracted by 0.98%.

BPS chief Amalia Adininggar Widyasanti stated that Indonesia’s economic growth was largely driven by household consumption, the biggest contributor to GDP, and exports.

Household spending was supported by holiday-related expenditures during the month of Ramadan and the Eid al-Fitr festival in March this year, but it grew by just 4.89% in Q1, slightly below the 4.91% growth in Q1/2024.

Gareth Leather, senior economist in the Asia team at Capital Economics, noted that Indonesia is considered one of the least trade-dependent economies in the region, and that U.S. tariff policies are expected to have only a limited direct impact on its economy.

The Indonesian Government has set a growth target of 5.2%. Meanwhile, President Prabowo Subianto has set an ambitious target of achieving 8% economic growth by 2029.