Indonesia Downplays IMF Growth Cut; Highlights Stronger Outlook than U.S., China

April 29, 2025 | 09:16 pm

TEMPO.CO, Jakarta - Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono Moegiarso, addressed the International Monetary Fund's (IMF) recent downgrade of Indonesia's 2025 economic growth forecast to 4.7 percent, arguing that the revised projection remains stronger than those for the United States and China.

According to Susiwijono, the IMF only corrected Indonesia's forecast by 0.4 percentage points. "The U.S. and China were downgraded by 0.9 points, and the global economic outlook was cut from 3.2-3.3 percent to just 2.8 percent. So, compared to major economies and the world at large, Indonesia's outlook remains relatively optimistic," he said at his office on Tuesday, April 29.

In its April 2025 World Economic Outlook, the IMF revised projections across the board, lowering Indonesia's growth forecast from 5.1 percent to 4.7 percent. The correction reflects growing trade tensions following the U.S. announcement of reciprocal tariffs.

Susiwijono remains confident that the government's 5 percent growth target for 2025 is still within reach. Negotiations with the U.S. on the new tariff structure are ongoing, and both countries have agreed to conclude talks within 60 days.

He also noted that Indonesia is one of the first countries to be granted negotiations with the U.S. regarding the tariffs. "The technical teams have already met. Other countries have not even gotten to that stage," he said.

Indonesia, he explained, has a more resilient economy because its GDP structure is less dependent on global trade compared to other nations. Domestic spending and consumer demand continue to drive growth.

"So structurally, we are more resilient than most economies," Susiwijono added.

Finance Minister Sri Mulyani Indrawati had echoed a similar view earlier, emphasizing that the IMF's revision for Indonesia was relatively mild. For example, Thailand's forecast was downgraded by 1.1 percentage points, Vietnam by 0.9 points, the Philippines by 0.6 points, and Mexico by 1.7 points.

Sri Mulyani attributed IMF's steeper growth cuts for those countries to their greater heavy dependence on foreign trade. "Their economies are  more exposed to international trade. And the impact or relationships of their economies are more tightly linked to the US," she said.

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