According to Indonesia’s Ministry of Finance, the administration of President Prabowo Subianto and Vice President Gibran Rakabuming Raka has recorded a series of significant economic achievements during its first year in office. The government has maintained strong macroeconomic fundamentals, stable growth, and improved social welfare despite a challenging global environment.
Building on the legacy of former Finance Minister Sri Mulyani Indrawati’s well-regarded fiscal discipline, the current administration continues to keep the state budget deficit below 3% of GDP and public debt under 40%, reinforcing market confidence.
Finance Minister Purbaya Yudhi Sadewa highlighted that in the second quarter of 2025, Indonesia’s economy expanded by 5.12%, one of the highest growth rates among G20 countries. He expressed optimism that economic performance will strengthen further by year-end. Inflation has remained contained at 2.65% year-on-year, and the fiscal deficit stood at only 1.56% of GDP — both among the lowest in the G20. This stability has been supported by strategic cash management, including the placement of around USD 12.5 billion in state-owned banks to stimulate productive economic activity.
Indonesia has also maintained a consistent trade surplus for 64 consecutive months, reflecting strong export performance. Meanwhile, unemployment declined to 4.76% in February 2025 — the lowest since the 1998 crisis — while the poverty rate fell to a historic low of 8.47% in March 2025. The capital market responded positively to these developments, with the Jakarta Composite Index reaching an all-time high of 8,257.86 on October 10, 2025, signaling investor confidence in the government’s economic direction.
Coordinating Minister for Economic Affairs Airlangga Hartarto underlined that Indonesia’s resilience stands out in a volatile global environment.
“Despite global economic uncertainty, Indonesia has managed to sustain growth above 5 percent. This shows that the government’s economic policies are on the right track,” Airlangga said, as quoted by MetroTV News.
Key Economic Achievements in the First Year
- Economic Growth: 5.12% in Q2 2025, among the highest in G20.
- Low Inflation: 2.65% (yoy) with food commodities as key drivers.
- Fiscal Stability: Deficit at 1.56% of GDP, debt ratio under 40%.
- Trade Surplus: Maintained for 64 consecutive months.
- Job Creation: 665,000 new jobs in one year.
- Poverty Reduction: Poverty at a record low of 8.47%.
- Capital Market Confidence: JCI hit record high of 8,257.86.
Job Creation and Investment Momentum
The Coordinating Ministry for Economic Affairs reported that job creation has tripled compared to the start of the previous administration.
“In the second quarter alone, we created 665,000 jobs — almost three times more than five years ago,” said Susiwijono Moegiarso, Secretary of the Coordinating Ministry, quoted by Indonesia Inside.
He attributed this to a sharp increase in investment, which has grown 2.5 times compared to early 2021. This investment has become a key driver of growth, creating a multiplier effect across various economic sectors. The government aims to further leverage investment as a main engine of future economic expansion.
Fiscal Policy and Growth Targets
Minister Purbaya reaffirmed the government’s commitment to prudent fiscal policy, continuing the discipline that earned Sri Mulyani international praise. He noted that while there were some challenges earlier — including liquidity buildup at the central bank that temporarily slowed economic activity — corrective measures have been introduced. The government now targets gradual acceleration toward 8% economic growth by the end of the administration’s term through investment climate improvements and targeted stimulus.
“We are moving in a better direction than before. Growth will gradually accelerate — not instantly, but steadily,” Purbaya said.
Source: Kemenkeu, MetroTV News, Indonesia Inside, SapaNusa
Photo Credit: kemenkeu.go.id
