Indonesia’s economic outlook Q4 2025
Apr 04, 2026
Indonesia concluded 2025 with steady economic growth and resilient underlying fundamentals,
Indonesia’s economic outlook Q4 2025
Indonesia concluded 2025 with steady economic growth and resilient underlying fundamentals, although signs of moderation are becoming increasingly apparent across sectors. While headline indicators remain positive, rising inflation and ongoing labour market challenges suggest a more uneven economic environment as the country moves into 2026.
Rather than signalling a downturn, current developments point to a transition towards a more measured phase of growth, requiring businesses to balance expansion ambitions with operational discipline and flexibility.
This article examines the country’s economic environment from Cimigo‘s perspective – Indonesia economic outlook Q4 2025
Indonesia’s economy expanded by 5.11% in 2025, bringing total GDP to approximately US$1.4 trillion. Growth continues to be supported by strong domestic consumption, expanding digital adoption, and improving financial inclusion. With a population exceeding 288 million and internet penetration surpassing 80%, the digital economy now contributes roughly 7% of national output.

Economic growth in late 2025 was led primarily by transportation and warehousing, information and communication, and financial services. These sectors recorded some of the strongest year-on-year gains, highlighting the ongoing importance of mobility recovery and digital transformation in shaping Indonesia’s economic trajectory.
Manufacturing remains the largest contributor to GDP, accounting for approximately 19% of economic output. Purchasing Managers’ Index (PMI) readings remained above the expansion threshold of 50, indicating continued industrial activity broadly in line with seasonal patterns observed prior to Ramadhan.
This suggests that while industrial activity remains stable, it is contributing more to economic continuity than acceleration.
Consumer confidence recovered to a comfortable level in early 2026, indicating improving public sentiment towards current economic conditions. Survey findings suggest that consumers increasingly perceive gradual economic improvement compared with the previous year.
However, perceptions of the labour market remain subdued. Many Indonesians continue to report difficulty in securing suitable employment, revealing a disconnect between macroeconomic performance and individual economic experience.

As a result, households appear cautiously optimistic, maintaining spending while remaining attentive to financial security.
One of the most significant developments towards the end of 2025 has been the acceleration of inflation, reaching approximately 4.76% year-on-year in early 2026. Rising prices have begun to place pressure on household purchasing power as well as business operating costs.
Inflationary pressures are increasingly shaping consumer behaviour, encouraging prioritisation of essential purchases and heightened price sensitivity across categories. Economic resilience therefore reflects adaptive consumption rather than expanding discretionary spending.

Retail sales continued to grow, increasing by 5.7% year-to-date and demonstrating the enduring strength of domestic consumption. Essential categories such as food, fuel, and clothing performed relatively well, while discretionary segments, particularly information and communication equipment, struggled to translate broader economic growth into stronger consumer demand. This divergence reinforces a broader behavioural shift: consumers remain active participants in the economy but are becoming increasingly selective in their purchasing decisions.
Indonesia enters 2026 with solid economic foundations but a more complex operating environment. Growth remains stable, though increasingly uneven across sectors and consumer groups. In this environment, efficiency, adaptability, and targeted market strategies will play a decisive role in determining business performance.
Companies that balance resilience with agility, managing costs while pursuing selective growth opportunities, will be best positioned to navigate inflation risks and uneven demand recovery in the year ahead.
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Đoàn Ngọc Huy (Johnny Doan), CMO & Market Research Expert -
As a Marketing Director and Market Research Expert Advisor across international markets, I have collaborated with numerous market research agencies, both global and local, that operate with a high level of professionalism and effectiveness. Cimigo is among the most outstanding. The Cimigo team demonstrates exceptional professionalism, strong commitment, and operational excellence. From research design and fieldwork execution to insight analysis, all stages are conducted rigorously, delivered on schedule, and closely aligned with business objectives. This is a highly capable team that I would confidently recommend to my partners and stakeholders.
As a Marketing Director and Market Research Expert Advisor across international markets, I have collaborated with numerous market research agencies, both global and local, that operate with a high level of professionalism and effectiveness. Cimigo is among the most outstanding. The Cimigo team demonstrates exceptional professionalism, strong commitment, and operational excellence. From research design and fieldwork execution to insight analysis, all stages are conducted rigorously, delivered on schedule, and closely aligned with business objectives. This is a highly capable team that I would confidently recommend to my partners and stakeholders.
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The team at Cimigo are my favourite researchers in South East Asia. They’ve proved adept at tackling the most private and complex personal issues at qualitative research level, not flinching when the client endlessly chopped and changed fieldwork timing, or ramped up the workload without warning. They have recruited the most extraordinarily niche consumers without pause or complaint. Their patience with clients and their flexibility and hard work that went above and beyond what was initially asked of them on two projects relating to sexual behaviour means there is now no other research company we would choose to work with in that part of Asia. The fact they also pulled off a third project for us so well, on men’s relationship with beer and beer advertising, shows they have breadth of expertise— we still quote from the report they produced.
The team at Cimigo are my favourite researchers in South East Asia. They’ve proved adept at tackling the most private and complex personal issues at qualitative research level, not flinching when the client endlessly chopped and changed fieldwork timing, or ramped up the workload without warning. They have recruited the most extraordinarily niche consumers without pause or complaint. Their patience with clients and their flexibility and hard work that went above and beyond what was initially asked of them on two projects relating to sexual behaviour means there is now no other research company we would choose to work with in that part of Asia. The fact they also pulled off a third project for us so well, on men’s relationship with beer and beer advertising, shows they have breadth of expertise— we still quote from the report they produced.
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