Indonesia’s economic performance update in the third quarter of 2025 reflects resilience amid a complex global economic environment. While global demand remained uneven and monetary conditions in advanced economies stayed tight, Indonesia managed to sustain solid growth supported by domestic consumption, stable investment flows, and ongoing industrial transformation. According to official statistics, Indonesia’s GDP grew 5.04% year-on-year (YoY) in Q3 2025, maintaining the country’s medium-term growth path. At the same time, investment realization strengthened, particularly in Foreign Direct Investment (FDI), signifying continued global investor confidence.
This update explores the key drivers of Indonesia’s Q3 2025 economic performance, with a focused look at the country’s investment climate and a case study on FDI trends in the manufacturing sector.
GDP Performance (Q3 2025)
Indonesia recorded 5.04% YoY GDP growth, supported by:
- Robust household consumption, aided by stable inflation and seasonal spending.
- Recovery in services, including transportation, hospitality, and education.
- Resilient exports, offsetting a slight moderation in domestic demand.
- Ongoing industrial down-streaming, which helped support manufacturing output.
Quarter-to-quarter (QtQ), GDP grew 1.43%, reflecting sustained business activity and improved mobility. Sectors tied to education, logistics, and modern services recorded above-average expansion compared to other industries.
Investment Performance (FDI & DDI)
Indonesia’s investment realization in Q3 2025 reached IDR 491.4 trillion, consisting of:
- FDI: IDR 212.0 trillion (43%)
- DDI: IDR 279.4 trillion (57%)
The top foreign investors included Singapore, China, Hong Kong, and South Korea, confirming that the Asia-Pacific region remains Indonesia’s key investment partner. Most FDI inflows were directed toward:
- Manufacturing (metal processing, chemicals, and electronics)
- Mining and downstream mineral processing
- Logistics, data centers, and digital infrastructure
The resilience of investment flows is also supported by policy stability. Bank Indonesia maintained its benchmark interest rate to preserve macroeconomic stability while the government continued fiscal support, including a liquidity injection program aimed at stimulating credit growth.
One of the most notable highlights in Q3 2025 is the rising trend of FDI in downstream manufacturing, particularly in the metal, battery, and renewable energy supply chain.
Indonesia is strengthening its position as a global hub for downstream mineral processing, especially nickel, copper, and bauxite, through policies that encourage smelter development and higher-value manufacturing activities. This strategy is designed to reduce raw material exports and attract higher-tech investment.
During Q3 2025, several large foreign investors expanded their projects in Indonesia’s EV battery and metal processing industries. Key developments included:
- Expansion of nickel smelter operations by investors from China and South Korea, responding to growing global EV battery demand.
- New investment commitments for cathode and precursor manufacturing, aimed at supporting integrated battery production in Indonesia.
- Increased capital inflows into renewable-powered industrial zones, reflecting investor preference for cleaner energy in industrial supply chains.
These investments contributed significantly to manufacturing FDI, helping the sector remain one of the largest recipients of foreign capital. Notably, these projects also supported job creation and technological transfer, strengthening Indonesia’s long-term competitiveness.
Resilience and Sustained Growth
Indonesia’s Q3 2025 economic performance demonstrates resilience and strong fundamentals. Sustained GDP growth, rising FDI inflows, and continued progress in industrial down-streaming indicate that Indonesia remains an attractive investment destination despite global uncertainties. The manufacturing sector, particularly downstream processing, continues to be a pillar of Indonesia’s economic transformation.
Looking ahead, maintaining policy consistency, supporting private sector confidence, and accelerating infrastructure and energy transition efforts will be essential for sustaining growth. If these conditions are met, Indonesia is well-positioned to close 2025 with stable performance and enter 2026 with renewed economic momentum.