Consumers Stay Upbeat Despite Slower Growth in Q1 2025
Main Takeaways
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JAKARTA, investortrust.id – Consumer optimism in Indonesia has remained resilient despite the country’s economy losing momentum in the first quarter of 2025. A new survey by the central bank indicates that households continue to express confidence in their current financial condition and future expectations, suggesting steady domestic demand.
Bank Indonesia, the nation’s central bank, reported that its April 2025 Consumer Confidence Index stands at 121.7—up slightly from 121.1 in March—signaling a strong positive outlook. The index reflects perceptions from households across urban areas and is a widely watched barometer for near-term consumption trends.
“This sustained optimism was supported by both the Current Economic Condition Index and the Consumer Expectations Index,” said Ramdan Denny Prakoso, Head of Bank Indonesia’s Communication Department, in a statement released Friday, May 9.
The Current Economic Condition Index rose to 113.7 in April from 110.6 a month earlier, highlighting improving sentiment around income and job availability. Meanwhile, the Consumer Expectations Index remained firmly optimistic at 129.8, though it dipped slightly from 131.7 in March.
Weak Q1 GDP, but Market Sentiment Improves
The central bank’s release followed a report from Indonesia’s official statistics agency, Badan Pusat Statistik, which showed that gross domestic product expanded by 4.87% year-on-year in Q1 2025. However, the economy contracted 0.98% on a quarter-to-quarter basis—pointing to a slowdown from the previous quarter and falling short of the government’s annual growth target of 5.2%.
Despite the underwhelming GDP print, capital markets have responded positively. In a separate briefing, Erwin Gunawan Hutapea, Head of Monetary Management and Securities Asset Department at Bank Indonesia, said there are signs of recovery in the domestic financial market, supported by foreign inflows into government bonds and central bank-issued rupiah securities.
“This signals a continued level of trust from investors in the Indonesian economy,” said Erwin. “While Q1 GDP came in slightly below the market consensus of 4.92%, the 4.87% growth rate is still considered robust by investors.”