Indonesia’s Economy Maintains Resilience Amid Global Uncertainty

JAKARTA, December 17, 2025 — Indonesia’s economy grew 5.0% in the first nine months of 2025, and growth is projected to remain around this level through 2026 and 2027, supported by strong investment and net exports.

According to the World Bank’s Indonesia Economic Prospects (IEP) December 2025 report, titled “Digital Foundations for Growth” released on December 16, 2025, the country’s monetary and fiscal policies have become more accommodative, with stimulus measures boosting private credit and consumption while maintaining fiscal discipline and moderate inflation. However, despite macroeconomic stability, labor market challenges persist, impacting household welfare. The economy is creating jobs for most labor entrants, but it is doing so mostly in low-value added sectors with many failing to pay middle-class wages. Between 2018 and 2024, real wages declined by 1.1 percent annually.

“Structural reforms can unlock productivity and driving the creation of better-paying jobs,” said Carolyn Turk, World Bank Division Director for Indonesia and Timor-Leste. “Improving skills, fostering competition, and strengthening the business environment through digitalization will open more opportunities for Indonesia to move towards high-value employment and ensure growth translates into better living standards for all.”

- World Bank