OCBC analysts maintain Indonesia’s growth forecast despite protests

The US and Malaysia recorded investments of US$0.8 billion and US$0.7 billion, respectively, ranking fourth and fifth during the quarter.

By sector, 2Q2025 investment realisation was dominated by the basic metals and non-machinery metal goods and equipment sector, with a value of IDR67.1 trillion (14.1% of total), followed by mining at IDR53.6 trillion (11.2%), and other services at IDR44.8 trillion (9.4%).

Indonesian President Prabowo Subianto aims to drive the country’s gross domestic product (GDP) growth to 8% before his current term ends in 2029. 2025 GDP growth is expected to reach 5.1% or higher, said Bank Indonesia Governor Perry Warjiyo on Aug 20, up from 5.03% in 2024.

Even with the protests that escalated in Jakarta on Aug 28, OCBC Global Markets Research economists Lavanya Venkateswaran and Ahmad A Enver have kept their 2025 GDP growth forecast for Indonesia unchanged at 4.7%.

See also: Indonesia readies stimulus, rate cuts to ensure 5% growth

This assumes a “sharper slowdown” to 4.5% in 2H2025 from 5.0% in 1H2025, write the economists in a Sept 1 note. This is due in part to Indonesia’s effective US export tariff rate of 24.5%, the highest in the region.

Demonstrators clash with riot police during a protest outside the parliament building in Jakarta on Aug 28

See also: Southeast Asia will likely grow faster than China over this decade in GDP and FDI, but mainly due to political reasons

Prabowo spoke to Indonesian business leaders and bankers some months ago, says Parwati Surjaudaja, president director and CEO of OCBC Indonesia. “The statements were very clear: the government needs to help businesses attract FDI to ensure that businesses can grow well.”

Indonesia is always open to business, says Martin Widjaja, wholesale banking director of OCBC Indonesia. “The government obviously has a focus to create business domestically, so they always welcome ‘creational’ operations.”

This draws a line between foreign firms simply looking to sell goods in Indonesia and companies that are looking to “invest in the country”, he adds. “I don’t think there are sentiment changes as far as investment is concerned … I’m not seeing a major headwind.”

Photo: Bloomberg