The World Bank estimates that Indonesia’s economic growth will grow by 4.7% this year. This projection was released in the Regional Economic Update 2025 report, today, Friday (4/25/2025). This projection for Indonesia is lower than the projection at the beginning of this year, which was 5.1%. This projection is based on the uncertain global situation which has hampered investment and consumption in the East Asia and Pacific region. In addition, trade restrictions will also affect the economic growth of Indonesia and East Asian countries.
“Trade restrictions are expected to impact the level of East Asia and Pacific exports, while slowing global growth is likely to further reduce external demand,” wrote the World Bank.
The World Bank’s projection is the same as the projections of BI and the International Monetary Fund (IMF). Last Tuesday (22/4/2025), the IMF estimated that Indonesia’s economic growth would reach 4.7% in 2025. The IMF cut Indonesia’s economic growth quite sharply to 4.7% in 2025 and 2026. This projection is much lower than the forecast in January 2025. At that time, the IMF projected that Indonesia’s economy would grow by 5.1%. This projection reduction is similar to the global economic slowdown due to the high trade tariff war, which was first implemented by US President Donald Trump against its main trading partner countries, and China responded with high reciprocal tariffs.
“If it continues, the sudden increase in tariffs and the uncertainty that accompanies it will slow global growth significantly,” said IMF Chief Economist Pierre-Olivier Gourinchas at a press conference on Tuesday night (22/4/2025) Indonesian time.
In line with the IMF, Bank Indonesia (BI) estimates that Indonesia’s economic growth has the potential to weaken this year, due to the tariff war between the main trading partners of the United States and China. BI Governor Perry Warjiyo said that the trade war that hampers international trade activities and investment will cause the economy to move in the lower range of the midpoint of 4.7%-5.5%.
“Slightly below the midpoint of the 4.7%-5.5% range is influenced by US tariffs that reduce Indonesian exports to the US and a decrease in export demand from other countries,” Perry emphasized during a press conference on the results of the Bank Indonesia Board of Governors (RDG) Meeting, quoted on Thursday (24/4/2025).
BI’s economic growth projection for the lower point of 4.7% is similar to the IMF’s projection of the potential slowdown in the Indonesian economy this year to 2026, which is also in the range of 4.7%.
April 25, 2025, CNBC Indonesia
(https://www.cnbcindonesia.com/news/20250425113522-4-628699/bank-dunia-imf-dan-bi-kompak-ramal-ekonomi-ri-tumbuh-47-di-2025)