Manufacturing sector anchors Indonesia’s 5.11% economic growth in 2025

Indonesia’s economy grew by 5.11 per cent in 2025, with the manufacturing sector emerging as the principal engine of growth, supported by rising investment levels and sustained industrial activity, according to official statistics.

According to ANTARA, economic expansion accelerated towards the end of the year, reaching 5.39 per cent year on year in the fourth quarter of 2025. During the same period, manufacturing output increased by 5.40 per cent, underscoring the sector’s central role in driving national performance. Investment momentum also strengthened, with gross fixed capital formation rising by 6.12 per cent, led primarily by domestic capital.

Manufacturing currently accounts for around 19 per cent of Indonesia’s gross domestic product, making it the single largest contributor to economic output. Continued investment in production facilities and higher utilisation of existing assets are expected to support further expansion of the sector in 2026, with growth projected to approach 6 per cent.

Industrial activity indicators also point to sustained momentum. Indonesia’s Manufacturing Purchasing Managers’ Index has remained in expansionary territory since August 2025 and stood at 52.6 in January 2026, signalling ongoing growth in production and new orders.

The construction sector, which represents close to 10 per cent of GDP, grew by 3.81 per cent in the final quarter of the year. This performance broadly tracked government spending growth of 4.55 per cent, supported by housing programmes, school renovations and infrastructure development.