Lukewarm economic data fuels scepticism over Indonesia's robust growth numbers

Analysts warn of misguided policies as retail sales fall, jobless claims rise

- Wahyudi Soeriaatmadja Indonesia Correspondent

A market in Indonesia's Aceh Besar. Statistics Indonesia has announced that the country's economy beat forecasts and grew 5.04 per cent between July and September 2025 compared with the same period in 2024, driven by tourism, education, business services and lower import growth. PHOTO: EPA

(PHOTO: EPA)

Car sales fell, cement sales declined and jobless claims rose — but the robust third-quarter economic growth announced by Indonesia’s statistics agency on Nov 5 painted a different picture from the three key indicators in the nation.

Statistics Indonesia (BPS) announced that the country’s economy beat forecasts and grew 5.04 per cent between July and September 2025 compared with the same period in 2024, driven by tourism, education, business services and lower import growth, among other factors.

However, economists and business groups have warned since August 2025 that Indonesia's official growth numbers may be overstated, obscuring an actual slowdown and potentially prompting misguided policy decisions.

“BPS might be doing it to prop up positive sentiments, but it would backfire as it would lead to wrong policies and would make foreign investors lose trust in government data,” said Dr Esther Astuti, who teaches in the Business and Economy Faculty at the Diponegoro University in Central Java.

Dr Esther noted how similar concerns on the validity of the growth figure were raised in August, when BPS reported a growth rate of 5.12 per cent for the second quarter of the year between April and June.

This figure had exceeded the forecasts by most economists, who put it at 4.8 per cent.

“It was a second-quarter paradox, where real income and investments fell, job loss claims rose, but the economic growth rose,” said Dr Esther, who had forecast that the third-quarter economic growth would be below 5 per cent.