Indonesia's Q2 GDP Growth Surprises at 5.12% YoY, Beating Estimates

Indonesia's economic growth accelerated unexpectedly in Q2, rising 5.12% YoY, beating a median estimate of 4.8%. Strong exports and resilient consumption eased pressure on policymakers amid uncertainty from US tariffs. The economy expanded 4.04% on a quarterly basis, with private consumption and gross fixed capital formation rising 4.97% and 6.99%, respectively. Exports increased 10.67%, benefiting from front-loaded shipments ahead of US tariffs. External risks persist due to the worsening trade war and slower global economy.

Indonesia's economic growth accelerated unexpectedly in Q2 2025, rising 5.12% year-over-year, beating a median estimate of 4.8%. This robust performance was driven by strong exports and resilient private consumption, which eased pressure on policymakers despite uncertainty from US tariffs. The economy expanded 4.04% on a quarterly basis, with private consumption and gross fixed capital formation rising 4.97% and 6.99%, respectively [1].

The growth was further bolstered by a 10.67% increase in exports, benefiting from front-loaded shipments ahead of anticipated US tariffs. However, external risks persist due to the worsening trade war and a slower global economy. The Indonesian economy contracted by 0.98% in Q1 2025, but the rebound in Q2 indicates a recovery from the previous quarter's decline [1].

Indonesia's economy has shown resilience in the face of global headwinds. While the trade war and US tariffs pose challenges, the country's diversified export base and strong domestic demand have helped to mitigate their impact. The government's focus on infrastructure development and structural reforms is also expected to support long-term growth [1].

Looking ahead, policymakers will need to continue monitoring the evolving global economic landscape and adjust policies accordingly to maintain Indonesia's growth momentum. The recent acceleration in economic growth is a positive sign, but the country must remain vigilant to external risks and continue to implement policies that promote sustainable and inclusive growth [1].

References:
[1] https://www.financialexpress.com/policy/economy/trumps-tariffs-could-reduce-indias-exports-to-the-us-by-26-billion-dollars-in-fy-25-26-warns-gtri/3936200/