Jakarta. Business lobby Kadin said Tuesday they remained upbeat that Indonesia’s full-year economic growth could outperform 2024 levels, potentially topping 5.03 percent as the government’s key programs are now in full swing.

The Central Statistics Agency (BPS) reported that Indonesia had registered a 5.03 percent expansion in 2024, marking a slight slowdown from 2023 figures of 5.05 percent and lagging behind the government’s 5.2 percent target. 

Kadin’s chairman Anindya Bakrie did not give the exact annual figure of the chamber of commerce’s full-year projections for 2025. However, the private sector expressed optimism that the nationwide school-feeding program, coupled with rising investments and newly struck trade deals, could become impetuses for growth.

“We are confident that the 2025 growth will beat last year’s figures, but we still need to assess how large the expansion will likely be. In terms of public spending, there are indeed budget austerity measures in the sub-national governments. But the government has launched the rural cooperatives program and the free meal rollout," Anindya told the press.

“Investment realizations are also on the rise.” 

Trade-wise, Indonesia has also recently secured greater market access to the world's major economies. As a case in point, Indonesia recently reached a substantive conclusion of its highly anticipated trade pact with the European Union (EU). This tariff-slashing Indonesia-EU Comprehensive Economic Partnership Agreement is expected to enter into force in early 2027. The accord with Canada, too, promises similar major tariff eliminations, but has to undergo some lawmaking processes. The pacts also came at a time when Indonesia was trying to diversify its export markets amid the US tariff campaign.

"This will lead to greater [production] capacities of our export-bound goods. Because we are selling similar goods [to Canada and the EU], be it footwear, garments, electronics, and furniture. That’s why I think our economy will grow at a faster rate,” the seasoned businessman said.  

"What's most important is supporting the businesses. When there are incentives and liquidity, it’s all about how the businesses can work together to propel the economy,” Anindya explained.

Over the past year, the Prabowo Subianto government has been paying special attention to the free meal program. As of early October, the government has spent approximately Rp 20.6 trillion ($1.2 billion) to prepare the meals for over 31 million individuals, be it schoolchildren, expectant mothers, and toddlers. Amidst mass food poisoning concerns, Prabowo chose to continue banking on the free meal initiative to boost the economy and job creation. The president recently claimed that studies showed that every $1 spent on the free meal drive could generate between $5 and $37 in return. 

Prabowo is also banking on the so-called Red and White Rural Cooperatives to promote the welfare of village communities. This nationwide co-op movement will cut the middlemen out in the distribution chain, thus making food more affordable. The government recently reported that Indonesia had amassed Rp 1,434.3 trillion (around $86.3 billion) in investments between January and September, up 13.7 percent year-on-year (yoy).

The government expects the gross domestic product (GDP) growth will fall within the range of 5.1 and 5.2 percent throughout 2025.

Purbaya’s Q4 Growth Target

BPS data showed that Indonesia expanded 5.12 percent yoy in the second quarter, a growth that had raised economic think-tank INDEF’s eyebrows, citing weak retail data. The statistics agency is expected to release the Q3-2025 data soon. 

President Prabowo Subianto has instructed his freshly minted finance chief Purbaya Yudhi Sadewa to pursue an expansion of beyond 5.5 percent in the fourth quarter. One of Purbaya’s biggest economic moves so far is transferring Rp 200 trillion ($12 billion) parked within the central bank to state lenders.

“I’m aiming for economic growth beyond 5 percent. The economy will likely expand at 5.5 percent [yoy] or more in the fourth quarter. The president had promised to give me a present if I could do it. I will tell you what the present is if I can book a growth of between 5.5 percent and 5.6 percent,” Purbaya said a few days ago. 

Prabowo has aimed to reach an 8 percent annual growth within his presidential term.

Read More: Danantara Still Reviewing $38.63 Billion Projects Meant to Move Up Value Chain