Indonesia’s economy grew 4.9 percent in the first quarter of 2025, doing better than expected even with global problems hitting hard, the World Bank said in its latest Indonesia Economic Prospects report. The country kept prices from rising too fast and didn’t overspend. That helped when government spending dropped and companies invested less. Poor families saw their situation improve, but middle-class households had to tighten their belts.
Global trade has been messy, and raw material prices keep jumping around—problems that have hit other developing countries hard. Indonesia managed to stay steady because it saved money during good times and watched its budget carefully.
The World Bank expects Indonesia to grow an average of 4.8 percent annually through 2027, with investment picking up thanks to a new housing program and the launch of the Danantara sovereign wealth fund. “Indonesia’s current economic performance reflects its strong fundamentals and sound policy response,” said Carolyn Turk, the World Bank’s division director for Indonesia and Timor-Leste. She said reforms could push growth higher and create better jobs. The government wants to build 3 million homes a year, which could create over 2.3 million jobs with $3.8 billion in public investment.
The housing push isn’t just about construction—it’s meant to lift the whole economy. The program could bring in $2.8 billion in private money while giving millions of Indonesians better places to live and work. If the government can cut red tape and fix trade policies, growth could hit 5.5 percent by 2027.
