THE results of a Bloomberg survey involving 31 Indonesian economists show that the Indonesian economy will slow down further in the second quarter of 2025, with growth of 4.80% (year on year or yoy).
If this prediction is realized, it will be a weakening in two consecutive quarters, considering that in the first quarter of 2025 the GDP rate has also weakened, growing only 4.87% (yoy), from 5.02% in the previous quarter.
If the second quarter contracts again, the Indonesian economy will enter a technical recession zone. The survey results also predict that the economic slowdown will be longer.
In the third quarter of 2025, GDP is predicted to only grow 4.70%, which is the weakest rate since the pandemic 5 years ago.
Economic slowdown
The slowdown cannot be separated from the lack of factors that can boost the rate because the peak of household consumption, which is the main driver of growth, has passed after Lebaran festive holidays last March 2025.
Meanwhile, trade is burdened by the effects of the trade war. Support for government spending is also difficult to expect, limited by the commitment to maintain the fiscal deficit at a safe level when the rate of state revenues is still showing a weakening trend.
The Indonesian government’s efforts to increase the community’s economic enthusiasm by providing a number of incentives certainly deserve appreciation. The government has certainly calculated its budget support capacity.
However, communication with certain stakeholders, such as toll road managers, seems to have not been carried out properly. This is because toll road management companies question the government’s reasons for providing a 20% toll rate discount. They do not know the mechanism, whether the discount will be compensated by the government or must be borne by the company.
The following are details of the economic stimulus in the form of various incentives available.
The incentives are first, three transportation discounts, namely a 30% discount on train tickets, a 50% discount on sea transportation tickets, and a discount on airplane tickets in the form of 6% VAT Borne by the Government.
Second, a 20% toll rate discount for 110 million users with a scheme like the discount on the Year-end and Lebaran holidays, which was valid during school holidays from June 5 to mid-July.
Third, a 50% electricity tariff discount for 79.3 million households using electricity of 1,300 VA and below, valid from June 5 to July 31, 2025.
Fourth, an additional Basic Food Card of IDR 200,000 per month for 18.3 million families for two months, as well as food assistance of 10 kg of rice for 18.3 million families.
Fifth, Wage Subsidy Assistance of IDR 150,000 per month for 17 million workers with salaries of up to IDR 3.5 million or the UMP/City/Regency, as well as for 3.4 million honorary teachers during June-July. And sixth, the extension of the 50% discount on Work Accident Insurance contributions for workers in the labor-intensive sector during August 2025-January 2026.
