Indonesia's economic growth is only expected to grow around 5% at the beginning of this year, due to the weak purchasing power of the public at the start of the year. 

"Overall, we are still optimistic that economic growth in the first quarter of this year can grow around 5%," said Bank Mandiri Economist Agus Santoso in the Power Lunch program on CNBC Indonesia, quoted on Tuesday (25/3/2025).

Agus Santoso said that this potential arises from the weak consumption of the public. This is reflected in the slowdown of purchasing power during seasonal periods, such as Ramadan and Eid, due to the surge in layoffs, and the potential decrease in public mobility during the Eid homecoming.

The Data Mandiri Spending Index as of March has only grown by 1.4% week on week. This is a sharp decline compared to the index growth during the same period last year of 4.7% week on week.

"We are calculating several simulations resulting from various dynamics in this first quarter, one of which is related to the increasing trend of layoffs, and then there is an issue related to the weakening purchasing power," said Agus.

"There is potential to reduce domestic consumption by 1.2% points quarter-on-quarter in the first quarter of this year," he emphasized.

"With that note, Agus assesses that public consumption at the beginning of this year will only move in the range of 4.9%-5%."

"However, he is optimistic that the economic growth rate this year will still be driven by investment trends, as liquidity in the financial market remains adequate."

"One positive thing that we still see in this regard is the liquidity in the market. So if we look at the real growth of M2 and also if we look at the quarterly money data that is currently in cash on hand in the community, it is still growing positively," he said.

Therefore, when public consumption normalizes starting in the second quarter of 2025, after the loss of the consumption-driving momentum during Ramadan and Eid which falls in the first quarter of 2025, it is estimated that the Indonesian economy has the potential to slow down in the second half of this year.

"We still estimate that in the second quarter of this year, it will grow around 4.9% to 5%. However, we see several factors, including possibly from the investment side, which will be one of the driving factors that we can expect will keep economic growth this year steady at 5%."

#mudikaman #mudiklancar #lebaransebentarlagi #HIJRIAH1446 #Indonesiaemas #lebaran2025 #Korlantaspolri #ganjigenap #oscarliving #belanjafurniturejadimudah #OLIV #PToscarmitrasuksessejahteratbk #Indonesia #Ramadhan #ramadhanKareem #ekonomiindonesia #sustainability #ekonomiindonesia #dayabelilemah