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Indonesia Economic Prospects, June 2025: People-First Housing - A Roadmap from Homes to Jobs to Prosperity in Indonesia

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dc.contributor.authorWorld Bank
dc.date.accessioned2025-06-23T14:35:11Z
dc.date.available2025-06-23T14:35:11Z
dc.date.issued2025-06-23
dc.description.abstractIndonesia’s economy remains resilient amid worsening global conditions. GDP grew at 4.9 percent year-on-year (yoy) in Q1-2025, slightly lower than previous post-pandemic quarters. Domestic demand was impacted by reduced government consumption and lower investment. Budget efficiency measures led to a contraction in public consumption, while investment in the construction and manufacturing sectors dipped due to investors’ concerns over domestic and global policy uncertainty. Meanwhile, declining commodity prices worsened Indonesia’s terms of trade. The supply side showed notable contributions from the agriculture and services sectors. Businesses and households are adjusting to economic uncertainty, but weak consumption of middle-class households has been persistent since the pandemic. The GOI structural reform agenda could accelerate growth further. In response to rising global policy uncertainty, the GOI devised a program of deregulation including reforms to the business environment and licensing, investment liberalization, trade and logistics reforms, and digital services. These reforms complement other reforms currently in play, like those related to financial sector deepening, and accompany the demand stimulus that the GOI is targeting through its priority programs. If implemented, these reforms could gradually expand the economy’s capacity, unlock further FDI, boost investment returns, and ensure productivity gains. The report suggests that this will translate into better job creation and raise GDP growth to 5.3-5.5 percent in 2026-2027. This report identifies the necessary steps to reach the target of providing 3 million housing units each year. In short, to meet the housing target and supercharge current efforts, the government needs to act as both a housing provider and a housing facilitator: instituting housing regulation reforms, accelerating public-funded housing programs, and creating an enabling environment that attracts private investment in Indonesia. Directly, 3.8 billion dollars in annual public investments can create an estimated 2.3 million jobs and mobilize 2.8 billion dollars in private capital. Reforms can create an enabling environment for housing investments and indirectly help multiply this impact.en
dc.identifierhttp://documents.worldbank.org/curated/en/099062225104041830
dc.identifier.doihttps://doi.org/10.1596/43361
dc.identifier.urihttps://hdl.handle.net/10986/43361
dc.languageEnglish
dc.language.isoen_US
dc.publisherWashington, DC: World Bank
dc.rightsCC BY-NC 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by-nc/3.0/igo
dc.subjectECONOMIC GROWTH
dc.subjectRESILIENT ECONOMY
dc.subjectHOUSING REGULATON REFORMS
dc.subjectPUBLIC AND PRIVATE INVESTMENT MOBILIZATION
dc.subjectSTRUCTURAL REFORM AGENDA
dc.titleIndonesia Economic Prospects, June 2025en
dc.title.subtitlePeople-First Housing - A Roadmap from Homes to Jobs to Prosperity in Indonesiaen
dc.typeReport
dspace.entity.typePublication
okr.date.disclosure2025-06-23
okr.date.doiregistration2025-06-25T02:10:39.000028Z
okr.date.lastmodified2025-06-23T13:05:17Zen
okr.doctypeEconomic & Sector Work::Economic Updates and Modeling
okr.doctypeEconomic & Sector Work
okr.docurlhttp://documents.worldbank.org/curated/en/099062225104041830
okr.guid099062225104041830
okr.identifier.docmidP506982-0b8e2a38-5889-41de-a25d-2dfbfdda222c
okr.identifier.externaldocumentum40023796
okr.identifier.internaldocumentum40023796
okr.identifier.report202459
okr.import.id7738
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttps://documents.worldbank.org/curated/en/099062225104041830/pdf/P506982-0b8e2a38-5889-41de-a25d-2dfbfdda222c.pdfen
okr.region.administrativeEast Asia and Pacific
okr.region.countryIndonesia
okr.sectorCentral Government (Central Agencies)
okr.sectorPublic Administration
okr.themeBusiness Enabling Environment,Macroeconomic Simulation and Policy Analysis,Macroeconomic Modeling,Macro-financial policies,Develop Financial Markets,Environment, Infrastructure, and Natural Resource Management,Economic Policy,Tax policy,Capital Markets,Adaptation,Exchange Rate Regimes, Investment Policy, Promotion, and Facilitation,Macroeconomic Model Development,Poverty and Equity, Productivity, Firm Dynamics, and Jobs,Public Expenditure Policy,Private Sector Development,Mitigation,Poverty and Equity,Climate Change,Monetary and Credit Policies,Finance,Fiscal Policy
okr.topicMacroeconomics and Economic Growth::Economic Development
okr.topicMacroeconomics and Economic Growth::Economic Growth
okr.topicMacroeconomics and Economic Growth::Investment and Investment Climate
okr.topicUrban Development::Urban Housing
okr.topicInternational Economics and Trade::Trade Facilitation
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