Alarm Bahaya Ekonomi Indonesia di Bawah 5%, Ekonom: Ini Masalah Struktural

Summary

In the first quarter of 2025, Indonesia's economy sharply contracted by 4.87%, continuing a trend of slowdown driven by declining consumption, government spending cuts, and shrinking investments. Analysts had predicted this downturn, especially considering global conditions and reduced domestic consumption. Key sectors like manufacturing and construction saw a decline in job creation, while challenges like rising unemployment and reduced demand for goods also impacted growth. Experts suggest that targeted government interventions, such as increased spending in strategic sectors and efforts to diversify investments, especially in labor-intensive industries like agriculture and tourism, are essential to revitalize the economy.

Takeaways

• 😀 Economic growth in Indonesia slowed to 4.87% in Q1 2025, continuing a downward trend that started in late 2024.
• 😀 The decline in economic growth is attributed to reduced consumer spending, government spending cuts, and a decrease in investments.
• 😀 Prabowo's target of achieving 8% growth in 2025 has become increasingly difficult to attain given the current economic challenges.
• 😀 Structural issues are identified as key causes of the slowdown, including a shrinking middle class and rising poverty levels.
• 😀 Despite expectations, the Ramadan and Eid festivities did not provide the expected boost to the economy, with 54% of the consumption target unmet.
• 😀 The reduction in household consumption and a rise in unemployment have further exacerbated economic difficulties.
• 😀 The manufacturing sector, particularly in the textile and footwear industries, has faced significant declines, with decreased demand both domestically and internationally.
• 😀 The PMI (Purchasing Managers Index) for manufacturing dropped to 52.4% in April, signaling a contraction in manufacturing activity.
• 😀 Government spending in Q1 2025 contracted by 1.38%, and the absence of an election year has led to a decrease in public sector spending compared to 2024.
• 😀 Experts suggest that the government should focus on increasing investment in labor-intensive sectors, such as agriculture and tourism, to create jobs and stimulate economic growth.

Q & A

What was the economic growth rate of Indonesia in Q1 2025, and what were the key factors behind the contraction?

Indonesia's economy contracted by 4.87% in Q1 2025. The primary factors behind this decline were a slowdown in consumer spending, reduced government expenditure, and shrinking investment inflows.

What does Josua Pardede attribute the economic contraction to, and how does he characterize it?

Josua Pardede attributes the economic contraction to structural issues rather than seasonal factors. He highlights the shrinking middle class, rising vulnerable populations, and decreasing household purchasing power as key contributors.

How did the Ramadan and Lebaran season impact economic growth in 2025?

Despite expectations, the Ramadan and Lebaran season did not significantly boost economic growth. The contribution from consumer spending, which traditionally rises during this period, fell short by 54%.

What were the trends in the manufacturing sector during Q1 2025, according to the PMI data?

The PMI data for April 2025 indicated a decline in manufacturing activity, with a drop to 52.4%. This reflects a decrease in both domestic and export demand, compounded by reduced workdays during the festive season.

What is the impact of external factors, such as trade wars, on Indonesia's economy?

External factors, including trade wars, have contributed to Indonesia's economic difficulties. The trade dispute between the U.S. and China has led to tariff increases, which have affected Indonesia’s manufacturing and export sectors.

How does Josua Pardede view government spending in relation to economic growth?

Josua Pardede believes that government spending is crucial for economic recovery. He emphasizes that while efficiency is important, targeted government spending—especially in sectors like infrastructure, subsidies, and labor-intensive industries—can stimulate growth.

What are the key sectors that Josua Pardede suggests the government should focus on to revive economic growth?

Josua Pardede recommends focusing on labor-intensive sectors like agriculture, tourism, and manufacturing. He also advocates for investing in infrastructure and creating jobs through public works programs to stimulate economic growth.

How does the government's fiscal policy, specifically in terms of subsidies, play a role in improving consumer spending?

Government fiscal policy, such as providing subsidies for electricity and other essential goods, can help increase the purchasing power of the middle class. This, in turn, would stimulate consumer spending, which is a critical driver of economic growth.

What is the current unemployment situation in Indonesia, and how has it been impacted by the economic slowdown?

Indonesia's unemployment rate has increased, with 7.28 million people affected by the contraction in the manufacturing sector. Job losses in industries like textiles, footwear, and retail fashion have significantly contributed to the rise in unemployment.

What specific actions can the government take to address the unemployment issue and create jobs in Indonesia?

The government can create jobs by accelerating investments in sectors such as agriculture, tourism, and infrastructure. Additionally, supporting small and medium enterprises (UMKM) and offering training programs for displaced workers could help reduce unemployment.