Jakarta. Indonesia’s economy expanded by 5.12 percent year-on-year in the second quarter of 2025, slightly accelerating from 5.05 percent in the same period last year, according to data released by the Central Statistics Agency (BPS) on Tuesday. Compared to the previous quarter, the economy grew 4.04 percent.

“Economic growth in Q2-2025 outpaced last year’s Q2 performance,” said Moh. Edy Mahmud, BPS Deputy for Economic Statistics, in a press briefing in Jakarta. “All business sectors grew positively on a year-on-year basis.”

In the second quarter, five key sectors contributed nearly two-thirds, or 63.59 percent, of Indonesia’s gross domestic product. Manufacturing remained the largest contributor with an 18.67 percent share, growing by 5.68 percent year-on-year. Agriculture accounted for 13.83 percent of GDP, growing by 13.53 percent, followed by trade at 13.02 percent, which expanded by 5.37 percent. Construction made up 9.48 percent of the economy, while the mining sector contributed 8.59 percent, growing modestly by 1.0 percent.

Growth in the manufacturing sector, the largest contributor, was driven by domestic and external demand. In particular, the food and beverage industry rose 6.15 percent, supported by rising exports of palm oil, cooking oil, and processed foods. The basic metals industry posted the highest growth within the sector at 14.91 percent, fueled by strong demand for iron and steel exports. Meanwhile, the chemicals and pharmaceuticals segment grew 9.39 percent as both domestic and overseas demand surged for pharmaceutical goods and chemical products.

The miscellaneous services sector saw the highest growth rate at 11.31 percent, thanks to a boost in domestic tourism during school holidays, national religious celebrations, and joint leave periods. This segment contributed 2.15 percent to overall GDP.

The information and communications sector, contributing 4.38 percent to GDP, expanded by 7.92 percent, boosted by rising data traffic and electronic transactions by businesses and households.

The construction sector grew 4.98 percent, in line with rising construction activity funded by both private investors and households. BPS noted higher imports of construction materials and increased cement procurement as supporting factors.

Trade, which accounts for 13.02 percent of GDP, grew 5.37 percent due to rising domestic and imported goods to meet household consumption. “Increased production activities in other sectors have also fueled trade,” Edy said.

Analysts Warn of Lingering Risks

Despite the strong Q2 performance, some economists had forecast more modest growth. Yusuf Rendy Manilet, an economist at the Center of Reform on Economics (CORE) Indonesia, had projected growth of 4.7 percent, citing external and domestic challenges.

“External pressures such as the US's 19 percent tariff policy and ongoing geopolitical tensions continue to weigh on our economy,” he said. “At the same time, weak household purchasing power and delayed government spending have hindered stronger growth.”

Many households, he added, have been forced to dip into savings to cover basic needs.

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