Jakarta – Indonesia’s economic growth in the second quarter of 2025 was recorded at 5.12% year-on-year (yoy), higher than the 4.87% growth in Q1 2025 and the 5.05% growth in Q2 2024. However, several economists believe the figure does not reflect the actual condition of the Indonesian economy.
Cumulatively, the economy showed signs of slowing. Growth in the first half of 2025 compared to the same period in 2024 stood at 4.99%, slightly lower than the 5.08% growth achieved in the first half of 2024.
In the midst of an economy that still feels sluggish, the above 5% growth figure for Q2 has raised questions. Observers believe the government needs to provide a more open and detailed explanation to prevent confusion and maintain market confidence.
“Many analysts and economists are still questioning the details of the 5.12% growth achievement, especially since several leading indicators that usually reflect the state of the economy appear to contradict the rise, particularly amid weakening indicators of purchasing power,” said Eko Listiyanto, an economist at the Institute for Development of Economics and Finance (INDEF), speaking to Infobank on Thursday (August 7, 2025).
Eko added that the market’s response to the growth data has not shown strong enthusiasm. The Jakarta Composite Index (IHSG), often seen as a short-term reaction indicator, has also not strengthened significantly.
“A more detailed and clear explanation from the government could help build future optimism. But if the curiosity of various groups is not met with clear answers, it’s highly likely the reported growth figure won’t be considered reliable for making business expansion decisions,” Eko added.
Therefore, to ensure the reported growth translates into positive expectations among businesses and the public, the government is urged to deliver a narrative that aligns with real economic conditions. Clear communication is considered essential to sustain public trust and foster a stronger investment climate. (*) Ari Nugroho
