Indonesia’s economy expanded at the fastest pace in more than three years in the fourth quarter, fueled by a surge in investment and household spending, official data showed on Thursday.
Gross domestic product grew 5.39 percent year-on-year in the fourth quarter, faster than the 5.04 percent expansion logged in the third quarter.
This was the fastest growth since the third quarter of 2022, when the economy expanded 5.73 percent and also exceeded economists’ forecast of 5.01 percent.
On a quarterly basis, GDP rose at a slower pace of 0.86 percent after rising 1.42 percent a quarter ago. Economists had forecast an expansion of 0.68 percent.
The economy grew 5.11 percent in the full year of 2025, below the government’s target of 5.2 percent. However, the rate was better than the 5.03 percent growth posted in 2024.
The expenditure-side of GDP showed that gross fixed capital formation posted the biggest growth of 6.12 percent in the fourth quarter. Household consumption was up 5.11 percent and government spending advanced 4.55 percent.
Exports and imports climbed 3.25 percent and 3.96 percent, respectively.
In January, the Bank Indonesia had kept its interest rate unchanged at 4.75 percent to support the currency and bolster economic growth. The bank had reduced the benchmark rate by 125 basis points in 2025.
The central bank had projected the economic growth to improve to 4.9 percent to 5.7 percent this year from an estimated 4.7 percent to 5.5 percent in 2025.
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