Jakarta. Indonesia’s economy grew 5.03 percent in 2024, slightly below the government’s 5.2 percent target and last year’s growth of 5.05 percent, according to data from the Central Statistics Agency (BPS). 

Acting BPS Head Amalia Adininggar Widyasanti said in a Wednesday briefing that fourth-quarter GDP grew 5.02 percent year-on-year, slightly lower than the 5.04 percent recorded in the third quarter. “All sectors recorded positive growth in 2024,” she said, highlighting manufacturing (18.98 percent), trade (13.07 percent), and agriculture (12.61 percent) as the largest contributors.

The fastest growth was seen in services (9.8 percent), transportation and warehousing (8.69 percent), and accommodation and food services (8.56 percent), driven by increased tourism, mobility, and recreational activities.

Economists predict stable growth for 2025, albeit with potential headwinds. Bank Danamon economist Hosianna Evalita Situmorang forecasts 2025 growth to hover around 5 percent, sustained by household consumption. “Recovering purchasing power will support consumption, though rising costs remain a challenge,” she said.

Bank Permata economist Josua Pardede attributed the weaker growth to a slowdown in household consumption, which increased by just 4.85 percent in the fourth quarter, down from 4.91 percent in the previous quarter. Key indicators, including retail sales, automotive sales, and money supply, also showed signs of deceleration. Car sales growth, for instance, fell sharply to 3.77 percent in Q4 from 14.82 percent in Q3.

“The slowdown reflects weaker purchasing power and reduced mobility,” he said, adding that global headwinds and muted private investment are likely to keep economic growth moderate in 2025.

Bank Indonesia Governor Perry Warjiyo projected 2024 growth near the lower end of the 4.7 percent-5.5 percent range, citing weaker domestic demand and exports. He warned that global uncertainties and subdued private investment may keep growth moderate into 2025.

Retail sales, automotive sales, and money supply indicators showed signs of deceleration in late 2024, reflecting softer household spending, particularly among middle-to-lower-income groups.

“Slower export demand from key trade partners, except the US, will weigh on growth, alongside subdued private sector investment,” Warjiyo added.

The World Bank, in its Indonesia Economic Prospects report released in October 2024, forecasted Indonesia’s GDP growth to average 5.1 percent annually between 2024 and 2026, despite challenges such as declining commodity prices, rising volatility in food and energy prices, and geopolitical uncertainties.