INDONESIAN Central Statistics Agency (BPS) reported that Indonesia’s economic growth was 4.87% (year on year or yoy) in the first quarter of 2025.
This figure is the lowest since the third quarter of 2021, when Indonesia was hit by Covid-19. This growth figure was below the growth in the first quarter of 2024 which was 5.1% (yoy).
Household matters
Household consumption is still the mainstay of economic growth. This component grew 4.89% and contributed 54.53% to GDP. This means that household consumption contributed 2.61% to the Indonesian economy which grew 4.87%.
Based on GDP growth by expenditure, all components grew positively, except for government consumption which only contributed 5.88% and its growth contracted by 1.38% (yoy).
Regarding this economic growth, among the G-20 member countries:
- Indonesia’s economic growth is still in second place, below China which grew 5.4%.
- Indonesia’s economic growth rate is higher than Malaysia which recorded economic growth of 4.4%, Singapore 3.8%, and Spain 2.9%.
We hope that in the second quarter of this year economic growth can be higher because the Indonesian government budget has started to run, so that the growth momentum can be maintained.
Massive layoff
Total number of Indonesian workers who were laid off from January to April 23, 2025 reached 24,036 people. This figure was almost a third of the total number of layoffs recorded throughout 2024, which was 77,965 people.
The most workers who were laid off were in Central Java Province, Jakarta, and Riau. In terms of business sectors, the manufacturing industry is the sector that laid off the most people with a total of 16,801 people.
In second place, the wholesale and retail trade sector, with a total of 3,622 people. Other service activity sector is in third place, reaching 2,012 people.
Paid-workers
Results of Indonesian National Labor Force Survey (Sakernas) showed that the working population in February 2025 was 145.77 million people, an increase of 3.59 million people from February 2024. Of this number of workers, 96.48 million Indonesians were recorded as full-time workers. Meanwhile, part-time workers reached 37.62 million people.
This number increased by 0.82 million people. Out of the workforce, 7.28 million people were unemployed. The number of unemployed people increased by 83 thousand people or 1.11% compared to February 2024. Based on the number of working population, 86.56 million people (59.40%) worked in the informal sector in February 2025.
Meanwhile, both the Indonesian Coordinating Minister for People’s Welfare and the Head of Indonesian National Economic Council (DEN) provided official confirmation that more than IDR 250 trillion of state funds used for social assistance had been wasted because they were misdirected.
The statements of the two government officials are of public concern because there has been a very large misuse of state finances and carelessness or deliberate decision-making that was not on target, ahead of the Indonesian presidential election in 2024.
