Indonesia annual Q1 GDP growth slowest in more than three years

Indonesia's economy grew 4.87 per cent in the first quarter from a year earlier, its weakest growth rate in more than three years, official data showed on Monday (May 5), compared with a 4.91 per cent growth rate expected by analysts in a Reuters poll.

The January-March growth was the slowest since the third quarter of 2021 and down from 5.02 per cent in the previous quarter.

On a non-seasonally adjusted, quarter-on-quarter basis, gross domestic product contracted 0.98 per cent, Statistics Indonesia data showed. Resource-rich Indonesia's economic growth has hovered around 5 per cent since the pandemic. President Prabowo Subianto, who took office last year, has pledged to lift that to 8 per cent during his five-year term, but is facing challenges from slowing global growth amid a trade war, as well as weakening domestic demand and a tighter budget position.

US-bound exports from Southeast Asia's biggest economy could be hit by hefty tariffs in coming months, with Jakarta discussing trade with Washington.

In the first three months of 2025, household spending, which makes up over half of the country's GDP, grew 4.89 per cent annually, the slowest pace in five quarters, despite higher spending during the fasting month of Ramadan and Eid al-Fitr festivities. Ramadan fell in March this year.

Investment growth at 2.12 per cent was the lowest in two years, while government spending contracted.

There was an increase in the net export contribution to GDP due to weakening imports.

The mining sector shrank about 1 per cent annually, affected by a drop in coal prices and weaker demand from international buyers, while maintenance lowered output at the Grasberg copper and gold mine operated by Freeport McMoRan.

The agriculture sector provided one bright spot in the data, with 10.5 per cent growth, boosted by stronger rice and corn harvests compared with the previous year.