World Bank Lowers Indonesia's 2025 Growth Forecast to 4.7%

TEMPO.CO, Jakarta -  The World Bank projects Indonesia’s economy to grow by 4.7 percent in 2025, a downward revision from its earlier forecast of 5.1 percent in January.

In the Global Economic Prospects report released in June 2025, the World Bank also anticipates that Indonesia’s growth will rise slightly to 4.8 percent in 2026 and reach 5 percent by 2027.

Indonesia is categorized as one of the emerging markets in the East Asia and Pacific region, along with countries like China and Thailand. For comparison, China’s economic growth in 2025 is projected to remain stable at 4.5 percent, while Thailand’s forecast stands lower than Indonesia’s, at 1.8 percent.

Globally, economic growth is now projected at 2.3 percent for 2025, a decrease from the 2.7 percent forecast at the start of the year. 

According to the World Bank, the global economy is currently facing challenges, particularly from increased trade tensions and the uncertainty of global economic policies.

“For countries with emerging economies, weak prospects limit their ability to increase job creation and reduce extreme poverty,” wrote the World Bank in a statement on Wednesday, June 11, 2025.

The Bank also outlined three strategic priorities to help boost growth in emerging economies: strengthening trade cooperation, restoring fiscal health, and promoting job creation.

Similarly, the Organisation for Economic Co-operation and Development (OECD) has also revised its outlook for Indonesia. In its Economic Outlook report, the OECD now forecasts 4.7 percent growth in 2025, down from 4.9 percent projected in March.

In response, Coordinating Minister for Economic Affairs Airlangga Hartarto emphasized that the downward revisions reflect a global trend.

“In terms of trade, this has also been reduced due to tariff wars or reciprocal tariffs imposed by the United States,” said Airlangga in a virtual press conference from Paris on Wednesday evening, June 4, 2025.

He explained that such trade tensions have shaved 0.5 to 0.7 percent off growth projections in several countries.

Airlangga added that the government is currently focusing on maintaining household purchasing power to support domestic growth. One key initiative includes the rollout of five economic stimulus packages.

“We also monitor various countries in the OECD, mostly also implementing packages to maintain the purchasing power of their people in the current situation,” he said.

Editor's Choice: Indonesia to Revise National Poverty Lines

Click here to get the latest news updates from Tempo on Google News

Prabowo Affirms Indonesia's Commitment to Non-Interventionist Military Policy

39 menit lalu

Indonesia to Revise National Poverty Lines

1 jam lalu

Indonesia Now Second-Highest in Global Tuberculosis Cases, with 134,000 Annual Deaths

1 jam lalu

Indonesia's KFC Franchise Secures Bank Mandiri Loan Following Mass Layoffs

4 jam lalu

Final Standings of Group C 2026 World Cup Qualifiers: Indonesia Finishes Fourth

5 jam lalu

Indonesia vs Japan 0-6: List of the Blue Samurai Team Goal Scorers

5 jam lalu

Patrick Kluivert Sees Japan Defeat as Lesson for Indonesian National Team

5 jam lalu

The Strengths of Japan According to Indonesian National Team Coach Patrick Kluivert

5 jam lalu

Indonesia's Minister of Religious Affairs Apologizes for Hajj Inconveniences

5 jam lalu

Indonesia Suffers Heavy Defeat 0-6 to Japan in World Cup Qualifiers

19 jam lalu