- Indonesia's GDP grew by 5.39% YoY in Q4-25 (5.11% YoY for FY2025), driven by household consumption and investment activity.
- Government support played a crucial role in reversing the slowdown in consumption.
- The slowdown in government consumption is attributed to a shift in the composition of government spending, where most of the fiscal acceleration is concentrated on capital expenditure.
- With volatility in the capital market over the past month, Bank Indonesia may choose to remain cautious, potentially maintaining the policy interest rate and allowing room for one additional cut this year.
