Official Q2 GDP Growth Surge Greeted with Surprise
The Indonesian government is claiming that growth in the second quarter of 2025 surpassed 5 percent, despite most analysts predicting growth of around 4.7-4.8 percent. Statistics Indonesia (BPS) announced on Aug. 5 that GDP growth for Q2 reached 5.12 percent year-on-year, the fastest pace in two years and surpassing market expectations. Q1 growth was below 5 percent.
The boost was attributed to strong household consumption, improved investment and robust export performance.
Moh. Edy Mahmud, Deputy for Balance and Statistical Analysis at BPS, said that Q2 gross domestic product (GDP) reached Rp 5.947 trillion, or Rp 3.396 trillion at constant 2010 prices, highlighting increased household consumption as a key driver.
“So, when compared to the second quarter of 2024, Indonesia’s economy grew by 5.12 percent year on year,” said Edy.
On July 1, Finance Minister Sri Mulyani Indrawati lowered her projection for 2025 growth to between 4.7 to 5.0 percent. She said at the time that economic conditions in the second quarter would continue to be influenced by US tariff concerns and said she hoped that 5 percent for the year was still “achievable.”
BPS reported that household consumption grew by 4.97 percent, contributing 2.6 percentage points to overall GDP growth, while investment via gross fixed capital formation rose 6.99 percent, adding 2.06 points. Exports led all expenditure-side components with a 10.67 percent increase.
Edy added said increased mobility during the religious holidays and school break also contributed to the increase. Online shopping transactions rose 7.55 percent quarter-on-quarter, reflecting a continuing shift to digital purchases, a trend dubbed the “Roh Halus” phenomenon, describing consumers who browse products in person but follow-up with online purchasing.
A number of well-placed observers expressed surprise at the figure and some economists flagged inconsistencies due to data anomalies.
Nailul Huda, Digital Economy Director of the Center for Economic and Law Studies, questioned the seasonal inconsistency, noting that Q1, typically boosted by Ramadan and Eid, only saw 4.87 percent growth, while the Q2 surge was a surprise. He also highlighted discrepancies in manufacturing data: BPS reported growth at the same time that the benchmark Purchasing Managers Index has fallen below 50 percent for the last four months, a sign of contraction in the sector. Manufacturing layoffs rose 32 percent year-on-year.
He also challenged the household consumption spike, saying it did not line up with leading indicators. “The lack of synchronization between economic growth data and leading indicators makes me personally question the reliability of the figures released by BPS,” said Nailul.
Yusuf Rendy Manilet, an economic researcher at the Center of Reform on Economics, projected more modest 4.7 percent growth, in line with other predictions. He cited external pressures such as US tariff hikes and geopolitical tensions, alongside domestic constraints like weak purchasing power and delayed government spending.
“Many families reportedly dipped into savings to meet basic needs,” said Yusuf.
While foreign outlets like the Vietnamese News Agency (VNA) and Business Today Malaysia highlighted the surprise uptick, Bloomberg was skeptical, noting that many consumers haven’t felt the recovery. Retail data showed muted performance: Matahari – a mainstay department store for many Indonesians – saw declining sales, Indofood CBP posted just 1.7 percent growth, and mall spending lagged behind foot traffic, according to Bloomberg.
Former industry minister Saleh Husin, now Deputy Chairperson for Industrial Affairs at the Indonesian Chamber of Commerce and Industry (KADIN), summed up the sentiment: “Growth above 5 percent is a surprise… public consumption and investment remain fragile.”
Related Links:
- https://en.tempo.co/read/2036277/indonesias-economy-grows-5-12-in-q2-but-expert-flags-data-anomalies#:~:text=TEMPO.CO%2C%20Jakarta%20%2D%20Indonesia's,that%20the%20data%20contained%20several
- https://jakartaglobe.id/business/indonesias-q2-gdp-grows-512-on-strong-manufacturing-trade-and-tourism
- https://www.cnbcindonesia.com/news/20250806063452-4-655390/ekonomi-ri-tumbuh-512-di-kuartal-ii-bi-ungkap-proyeksi-ini
- https://finance.detik.com/berita-ekonomi-bisnis/d-8047047/bps-ungkap-3-motor-pendorong-ekonomi-ri-tumbuh-5-12
- https://www.cnbcindonesia.com/news/20250806065947-4-655392/ramai-media-asing-sorot-data-baru-pertumbuhan-ekonomi-ri-sebut-ini
Where’s Riza Chalid? AGO Requests Red Notice for Fleeing Graft Suspect
The Attorney General’s Office (AGO) is seeking a red notice from Interpol for oil trader Riza Chalid, a suspect in a major corruption case who has ignored repeated summonses for questioning and is believed to be in hiding abroad.
Immigration records show Riza entered Malaysia in February and has not left, prosecutors say.
“Investigators will soon take further legal action, including placing him on the wanted list and requesting red notices,” AGO spokesperson Anang Supriatna said on Aug. 5 as he announced the seizure of five cars owned by Riza as evidence in a case related to oil procurement by Pertamina.
The AGO has also seized assets linked to Riza, including Rp 833 million in cash, as part of its ongoing efforts to recover state losses. “We are still giving him the opportunity to cooperate,” Anang said. “But if he continues to ignore legal procedures, we will take firmer action, including seeking international assistance through Interpol.”
Riza, dubbed the “gasoline godfather” for his prominent role in the fuel trade, allegedly conspired with Pertamina executives to manipulate a lease agreement for a fuel terminal in Merak Port in Banten despite Pertamina having no need for additional fuel storage. Riza was long considered untouchable despite numerous allegations being raised about him over many years.
As the beneficial owner of private fuel terminal PT Orbit Terminal Merak and logistics company PT Tangki Merak, Riza allegedly profited from the inflated terminal deal, resulting in state losses of at least Rp 286 trillion (US$17.5 billion), according to prosecutors.
Investigators have arrested 17 suspects in the case so far, including high-ranking Pertamina officials and Riza’s son Kerry Adrianto Riza. Riza remains the only suspect still at large
The case implicating Riza started from an investigation centered on fraudulent fuel import schemes between 2018 and 2023 as well as the procurement of lower-octane subsidized gasoline allegedly sold as a more expensive brand.
The AGO spokesperson said that the red notice has been discussed with Interpol and should be issued soon.
Prosecutors are also seeking a red notice for Jurist Tan, a suspect in a Rp 9.3-trillion laptop procurement case related to the education ministry between 2020 and 2022. Jurist is the only suspect not yet detained. The education minister at the time, Nadiem Makarim, the cofounder of Gojek, has been questioned by the AGO as a witness in the case but is not yet a suspect.
Related Links:
- https://www.thejakartapost.com/indonesia/2025/08/06/ago-requests-red-notices-for-graft-suspects-fleeing-abroad.html
- https://jakartaglobe.id/news/ago-to-issue-red-notice-for-fugitive-tycoon-riza-chalid
- https://www.cnbcindonesia.com/news/20250805085316-4-655074/buron-riza-chalid-bakal-ditetapkan-jadi-dpo-kena-red-notice
- https://www.tempo.co/hukum/riza-chalid-dan-jurist-tan-masuk-red-notice-interpol-apa-artinya--2054927
Danantara to Join with PLN and Pertamina in Huge Geothermal Plan
State investment fund Danantara is orchestrating a massive geothermal development partnership between state-owned oil company Pertamina and state-owned electricity provider PLN.
Danantara, which now oversees the assets of all state-owned enterprises (SOE), is anxious to boost power generation to support the national energy security agenda and to fast-track the transition to clean energy.
In a statement released on Aug. 5, Danantara CEO, Rosan Roeslani, who is also investment minister, said geothermal energy is a national strategic asset that will assist the eventual transition to a low-carbon economy.
“Through cross-SOE collaboration, Danantara supports inclusive and sustainable economic growth, while strengthening Indonesia’s energy independence,” he said.
The initiative will support the Enhanced Nationally Determined Contribution 2030 target, and the Net Zero Emission 2060 vision by harnessing geothermal energy, he said.
The collaboration between PLN and Pertamina was outlined in a Heads of Agreements deal coordinated by Danantara.
Rosan said that the agreements have been formalized through a consortium, specifically for the Ulubelu Bottoming Unit in Lampung and the Lahendong Bottoming Unit in North Sulawesi.
“Danantara will ensure that this collaboration promotes operational efficiency and sustainability,” he added.
In addition, the collaboration aims to determine the potential for geothermal power plant development, through new projects and the accelerated completion of ongoing projects.
Under the partnership, 19 existing projects with a capacity of approximately 530 megawatts (MW) will be accelerated. Both parties have agreed to evaluate the potential for additional development, in both existing working areas and new prospective areas.
Rosan said that the potential capacity could reach 1,130 MW with an estimated investment value of up to $5.4 billion.
Related Links:
- https://en.antaranews.com/news/371329/danantara-helps-pertamina-pln-forge-geothermal-collaboration
- https://www.bloombergtechnoz.com/detail-news/79604/danantara-terlibat-proyek-geothermal-rp88-t-di-jv-pgeo-pln
- https://katadata.co.id/finansial/bursa/6891d8ae4626c/danantara-dukung-pln-dan-pgeo-kembangkan-proyek-panas-bumi-jumbo-rp-88-triliun
- https://www.bloombergtechnoz.com/detail-news/79604/danantara-terlibat-proyek-geothermal-rp88-t-di-jv-pgeo-pln
Trade and Logistics Committee Discusses Tariff Deal
AmCham Indonesia’s Trade and Logistics Committee held a meeting on Aug. 5 to discuss the US-Indonesia tariff agreement, focusing on the impact and potential opportunities. Speakers included M. Firman Hidayat, Executive Director of the National Economic Council, and Ilham Bustami, Head of Government Affairs for Indonesia, Malaysia, and The Philippines at FedEx.
The discussion was moderated by Devi Kusumaningtyas, Director of Government and Public Affairs for Indonesia, India and Malaysia at Nike, and was held at Nike Indonesia’s office.
Firman outlined Indonesia’s strategy in negotiating with the United States, including simulations showing the economic implications of different scenarios. Meanwhile, Ilham shared insights on evolving global logistics priorities, emphasizing the importance of cost transparency, flexibility and pre-clearance systems to facilitate trade flows.
The forum also explored opportunities to diversify export markets, pursue trade agreements such as the EU-Indonesia Comprehensive Economic Partnership Agreement and strengthen supply chain resilience.
We thank our speakers and members for their contributions to this important discussion, and Nike Indonesia for hosting the event. We look forward to continued collaboration in advancing Indonesia’s economy through the trade and logistics sector.
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Update is AmCham’s regular newsletter on developments related to investment, the economy, regulations and issues related to doing business in Indonesia. It comes out three times a week. It is edited by AmCham Managing Director Donna Priadi and written by the AmCham Staff
