TEMPO.CO, Jakarta - Indonesian Finance Minister Sri Mulyani has lowered Indonesia's economic growth in 2025 from 5.2 percent to a range of 4.7 to 5 percent.
The updated forecast was presented during a working meeting with the Budget Agency of the House of Representatives at the Parliament Complex in Senayan on Tuesday, July 1, 2025. "We estimate economic growth in 2025 in the range of 4.7 to 5.0 for the second semester. So overall [growth] is between 4.7 to 5.0," she said.
The government also estimated that inflation will be between 2.2-2.6 percent in the second semester of 2025. Meanwhile, the rupiah exchange rate is projected to be in the range of Rp16,300 to Rp16,800 per US dollar.
In her presentation, the state treasurer noted that economic conditions in the second quarter would be impacted by President Trump's tariff announcement and the ongoing conflict in the Middle East. "We need to remain vigilant against global risks so that the 5 percent outlook is maximized to remain achievable," Sri explained.
She also mentioned that several priority government programs implemented in the second semester are expected to generate a multiplier effect on the economy. These programs include Free Nutritious Meals, Red and White Village Cooperatives, and People's Schools.
In addition to revising economic growth projections, Minister Sri predicted that the 2025 State Budget (APBN) deficit would widen to Rp662 trillion, or equivalent to 2.78 percent of Gross Domestic Product (GDP). This projection is wider than the government's initial target of maintaining the state budget deficit at Rp616 trillion, or 2.53 percent of GDP. However, Sri affirmed that the government would strive to keep the deficit below 3 percent of GDP.
According to Sri, this deficit hike is partly due to reduced state revenues. "In the first quarter of 2025, we will experience quite a bit of pressure from the state revenue side because several measures, such as Value Added Tax that was not collected, and also dividends from State-Owned Enterprises (SOEs) that were not paid because they are now held by Danantara," she elaborated.
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