Indonesia’s Economy Sustains Growth Amid Global Uncertainty

Jakarta, May 5 – Statistics Indonesia (BPS) today released its latest data covering three key indicators: Gross Domestic Product (GDP), labor market performance, and the Gender Inequality Index (GII). These indicators provide essential insights into the direction of Indonesia’s economic and social development.

Amid mounting global economic headwinds, Indonesia’s economy continued to post positive growth. Several major trading partners faced mounting pressure: the United States economy expanded by 2.0 percent, Japan by 1.8 percent, Singapore by 3.8 percent, while South Korea experienced a contraction of 0.1 percent in Q1 2025.

Indonesia’s economy grew by 4.87 percent (year-on-year) in the first quarter of 2025. Although this was slightly lower than the 5.11 percent growth recorded in the same period last year, the growth trajectory remains intact. The Chief Statistician, Amalia Adininggar Widyasanti, stated, “Indonesia’s economic growth in Q1 2025 reached 4.87 percent, supported by double-digit growth in the agriculture sector, solid performance in food and beverage manufacturing, and robust activity in transportation services. Seasonal factors, including Ramadan and Eid al-Fitr, also contributed to the upward momentum.”

From the expenditure side, exports of goods and services expanded strongly by 6.78 percent, driven by increased exports of several key non-oil and gas commodities, including animal/vegetable fats and oils, iron and steel, electrical machinery, and motor vehicles and parts. A rise in international tourist arrivals also bolstered service exports. Meanwhile, government consumption contracted by 1.38 percent, attributed to normalized government spending following elevated expenditures during the election cycle in Q1 2024. Gross Fixed Capital Formation (GFCF) grew at a slower pace of 2.12 percent amid continued global uncertainty.

From the production side, the agriculture sector recorded its highest growth in recent years, expanding by 10.52 percent. This marked a sharp turnaround from the same quarter last year, when the sector contracted by 3.54 percent. Amalia explained, “This strong performance was underpinned by a significant rise in rice and maize production—up 51.45 percent and 39.02 percent respectively in Q1 2025 compared to the same period last year—and higher domestic demand.” She added, “Food crops grew by 42.26 percent, while livestock production rose by 8.83 percent, driven by increased demand for meat and eggs during Ramadan and Eid al-Fitr.” The manufacturing sector remained the largest contributor to GDP, growing by 4.55 percent, while the information and communication sector posted a robust 7.72 percent growth, reflecting the increasing role of digitalization in the national economy.

Spatially, Java Island recorded economic growth of 4.99 percent, while Sulawesi led with 6.40 percent—both above the national average. Meanwhile, Maluku and Papua regions posted positive growth of 1.69 percent, albeit at a slower pace compared to the same quarter last year.

Unemployment Rate Declines Slightly

Indonesia’s open unemployment rate (OUR) stood at 4.76 percent in February 2025, down from 4.82 percent in February 2024. “Although the unemployment rate declined, the absolute number of unemployed increased from 7.20 million to 7.28 million, or by around 80 thousand individuals. This was due to the labor force expanding at a faster pace than employment absorption,” said Amalia. She further noted that the proportion of informal employment rose slightly from 59.17 percent in February 2024 to 59.40 percent in February 2025.

Over the past year, 3.59 million people entered the labor market. The three sectors with the largest employment gains were: Trade (0.98 million), Agriculture (0.89 million), and Manufacturing (0.72 million).

According to the International Labour Organization (ILO) standard, individuals who worked at least one hour during the reference week are categorized as employed—a standard also adopted by many other countries. BPS classifies the employed population into three groups: full-time workers (≥35 hours/week), part-time workers (<35 hours/week but not seeking or willing to accept additional work), and underemployed (<35 hours/week and seeking or willing to accept more work). As of February 2025, full-time workers made up 66.19 percent of the employed population, part-time workers 25.81 percent, and underemployed 8.00 percent.

Gender Inequality Continues to Decline

The final indicator released by BPS was the Gender Inequality Index (GII), which assesses inequality across three dimensions: Reproductive Health, Empowerment, and Labor Market Participation. A lower GII score indicates reduced inequality between men and women. Indonesia’s GII continued to improve, reaching 0.421 in 2024—an improvement from 0.447 in 2023. This represents a 5.82 percent reduction year-on-year, more than double the average annual reduction observed between 2018 and 2023. “This improvement reflects narrowing gender disparities,” Amalia remarked.

Several components of the GII demonstrated notable progress. For instance, the proportion of births not attended in health facilities declined to 0.094, down 0.032 points from 2023. The gender gap in the proportion of male versus female members of parliament fell from 55.72 percent in 2023 to 55.08 percent in 2024. Meanwhile, the female labor force participation rate (LFPR) increased by 1.9 percentage points, outpacing the male LFPR increase of 0.40 percentage points.

Nonetheless, regional disparities persist. The GII in 22 provinces remained above the national average, particularly in Maluku, Papua, Kalimantan, and parts of Sulawesi and Sumatra. In contrast, most provinces in Java, Bali, and Nusa Tenggara performed better than the national average. In 2024, for the first time, BPS published GII data for all 38 provinces, including the newly established autonomous regions in Papua and West Papua. This was made possible by improved availability of gender-disaggregated data from regional legislative bodies.