Indonesia’s economic outlook Q2 2025

Admin
Aug 19, 2025

As Indonesia approaches the end of Q3 2025, the economic outlook is being shaped significantly by various factors affecting consumer behaviour, retail sales, and sectoral growth. This article examines the economic environment, focusing on key indicators beyond GDP and providing a more nuanced view of the country’s economic situation from Cimigo‘s perspective.

A glance at Q2 2025’s key results

Imports climbed to $60.2 billion, reflecting a 9.4% rise. This growth outpaced exports, affecting Indonesia’s trade balance, which performed poorly last year.

Indonesia Q2 2025 economic performance

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Sectoral growth insights point to transportation and warehousing leadership.

A detailed look at the GDP growth projections by sector shows that areas such as transportation and warehousing are set to lead in economic contributions. The agriculture and trade sectors are also expected to record gradual growth, strengthening their roles in driving the economy forward.

Indonesia Q2 2025 GDP growth by sector

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Manufacturing sector recovery indicates gradual growth amid challenges.

The manufacturing sector remains a focal point of Indonesia’s economy, with the Purchasing Managers’ Index (PMI) indicating modest recovery at 49.2. This figure reflects the sector’s gradual rebound, although it grapples with the effects of previous contractions, signalling a complex recovery.

Consumer confidence, by contrast, shows growing concern. The Consumer Confidence Index has fallen to its lowest level in three years, indicating a notable drop in sentiment. This has implications for spending behaviour, as households display increasing caution in the face of economic uncertainty.

Indonesia Q2 2025 consumer confidence

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Retail performance data show year-to-date growth of 1.9% in real retail sales. This growth is driven primarily by essential sectors, particularly food, beverages, and tobacco. This highlights a shift towards necessary consumables as households adjust spending in response to economic pressures.
The overall retail environment is under scrutiny, particularly regarding consumer perceptions. A recent Cimigo survey in Q2 revealed that finding suitable employment remains challenging, with reported difficulties rising significantly compared with the previous year. This insecurity likely contributes to a more cautious approach to household spending.

Indonesia Q2 2025 job finding difficulty

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Navigating Indonesia’s economic moderation. Indonesia’s economic outlook Q2 2025.

Indonesia’s economy is entering a phase of moderation, characterised by softer domestic demand and a narrowing external trade buffer. In this environment, businesses must remain agile, balancing cost control with market diversification to withstand prevailing headwinds. Aligning production targets and inventory levels with slower consumer demand can help avoid excess stock and unnecessary capital tie-up, while increasing local sourcing can reduce currency risk from higher imports and strengthen operational stability.

Companies should emphasise affordability, durability, and essential features to appeal to cost-conscious consumers in an inflationary climate to maintain competitiveness. Streamlining processes, optimising input costs, and adopting automation can help safeguard margins despite subdued demand growth. Those able to combine disciplined cost management with a strategic response to shifting consumer priorities will be best placed to sustain performance in Indonesia’s evolving market landscape.

Looking for more insights on Indonesia? Explore other reports from Cimigo here.

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