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Economic growth

Indonesia's Economy Remains Resilient Amid Global Challenges

Strategic Insights

— 2 min read

Indonesia's economy continues to perform well despite global uncertainty and volatility, according to QNB's latest report. The country's strong domestic consumption, expansionary monetary policies, and ongoing infrastructure and capital spending projects are the key drivers contributing to its stable growth. The Indonesian economy has delivered exceptional economic growth and stability over the past few decades, with an average growth rate of 5% from 2000 to 2024, making it a strong achievement for the world's fourth most populous country.

Key Takeaways:

  • The Indonesian economy has maintained an average growth rate of 5% from 2000 to 2024, a strong achievement for the country.
  • Domestic consumption continues to be a strong growth driver, accounting for 55% of GDP, and is supported by a resilient labor market.
  • The labor market has seen a remarkable recovery since COVID, with unemployment dropping from 7.1% in 2020 to 4.8% in 2025, its lowest level since 1998.
  • Indonesia has implemented expansionary monetary policies, with low inflation and a stable exchange rate for the Indonesian rupiah.
  • Bank Indonesia has taken several steps to boost credit in the economy, including lowering reserve requirements and raising foreign financing limits for domestic banks.
  • The central bank has also committed to purchasing $9.3 billion in government bonds on the secondary market and allocated $7.9 billion to support the government's affordable housing program.
  • Indonesia is moving forward with large-scale infrastructure and capital investment projects to attract more investment and boost the economy's productive capacity.
  • The newly launched sovereign wealth fund Danantara has been tasked with focusing on strategic investments, such as natural resource processing and the development of artificial intelligence technologies.

Statistics:

  • Average growth rate of 5% for the Indonesian economy from 2000 to 2024.
  • Domestic consumption accounts for 55% of GDP and is the central element in supporting economic momentum.
  • Unemployment dropped from 7.1% in 2020 to 4.8% in 2025, its lowest level since 1998.
  • Annual inflation has remained low and within the target range of 1.5%-3.5%.
  • The Indonesian rupiah rebounded by nearly 3.5% after hitting its lowest point on April 9.
  • Bank Indonesia cut interest rates by 25 basis points in May to 5.5%, marking the third rate cut since September last year.
  • The central bank has committed to purchasing $9.3 billion in government bonds on the secondary market.
  • The bank has also allocated $7.9 billion to support the government's affordable housing program.

Sources:

  • QNB's weekly report, June 2025.
  • Qatar News Agency, June 28, 2025.

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