Feeding President Prabowo Subianto’s ego with the wrong message is the last thing Indonesia needs. But that seems exactly what is happening. His long-dismissed dream of 8 percent annual GDP growth, once seen as political theater, now exerts real-world pressure on how economic figures are shaped. In effect, data has become a performance, not a reflection.
Indonesia’s statistical bureau, BPS, announced on Tuesday that the economy grew 5.12 percent year-on-year in Q2, its swiftest pace since mid-2023. That single decimal became a baton brandished by Finance Minister Sri Mulyani, who hailed it as vindication of her budgetary stewardship and declared with finality, “We trust BPS.”
Yet behind the applause, whispers of skepticism circulated among economists, many of whom had pegged consensus growth at closer to 4.7 percent or 4.8 percent. The BPS figure failed the eye test. It jarred against slumping car sales, declining consumer confidence, contracting manufacturing, and retreating foreign capital, as widely reported across Indonesia’s media.
This dissonance unveils a deeper malaise: moral hazard, where BPS faces little downside should the numbers overshoot, while political actors bask in the glow. Here, politics becomes the auditorium, not economics. The problem lies in circular logic. BPS claims GDP rose because its own measured components – consumption (+4.97 percent), investment (+6.99 percent), and exports (+10.67 percent) – rose too. Those internal figures then bolster the GDP total, creating a closed loop and the false logic of tautology, where assumptions validate themselves rather than withstand scrutiny.
Look at consumption. BPS prides itself on nearly 5 percent growth, yet car sales, a bellwether of consumer demand, fell almost 10 percent during the first half of 2025 and plunged another 22 percent in June alone. Retail sales barely moved, and household sentiment dimmed. If such indicators are in retreat, where is the consumption revival? Statisticians may not be lying, but their numbers feel scripted to flatter.
Investment tells a similar tale. BPS declared a 7 percent leap, yet foreign direct investment, the clearest marker of global confidence, dropped 7.5 percent in one quarter, its steepest post-pandemic slide. Private-sector investment stalled; infrastructure packages arrived late in the quarter. Yet because BPS recorded “investment up,” headline GDP must reflect that momentum.
Export growth of more than 10 percent dazzles, but it overlooks a key truth: much of that gain likely stems from a depreciating rupiah and volatile commodity prices. Actual export volumes in staples like palm oil and coal have stalled or declined. If BPS applies outdated deflators, nominal gains can be mistaken for real progress.
Even government consumption, actually down 0.3 percent, was spun as a recovery from steeper contraction in Q1. Politicians praised the slowing decline, even as real fiscal retreat remained. Such distortion is not harmless showmanship. It weakens governance. Inflated figures lure policymakers into false confidence, misdirect investor sentiment, and mislead citizens into expecting a phoenix economy, not a fragile recovery. And when reality bites, trust erodes. And trust, once lost, is painful to recover.
But who shapes this script? Is BPS caving to expectations? Could Prabowo’s inner circle, who are yearning for economic legitimacy, be applying pressure, subtle or direct? Or do statisticians, eager to stay relevant in a politically fraught environment, voluntarily align with the narrative? The source of coercion may be opaque, but its effect is clear: data coheres with political hopes rather than economic evidence.
Reuters captured this tension, quoting economists who questioned how the GDP figure hewed so neatly to a long-held presidential target. The statistical leap spawned credibility doubts and demands for transparency, yet neither BPS nor government officials offered explanations for why real-world indicators diverged so starkly from public figures.
This is how moral hazard takes root. When a statistical office expects that writing optimistic numbers invites praise, not penalty, the incentive tilts toward convenience. It’s not outright fraud, but a structural drift—where institutional survival or political favor outweigh impartial analysis. And the public, ultimately, pays the price.
Because the dangers are real, and they are not abstract. When a government begins to believe its own hype, policy becomes unmoored from economic reality. Budget allocations may be tightened when stimulus is still needed. Interest rates may remain high under the assumption that growth is robust, burdening businesses and households unnecessarily. Fiscal programs could be cut too soon, believing poverty has declined, even as real hardship worsens.
For ordinary Indonesians, this can be catastrophic. When growth is overstated, wage stagnation is masked. When consumption is exaggerated, falling purchasing power is overlooked. When the job market is artificially inflated, the underemployed go uncounted. And when poverty is underreported, such as when BPS quietly adjusts its poverty line downward while the World Bank’s international threshold indicates 60 percent of Indonesians remain near or below vulnerability, policy interventions miss their mark.
This distortion doesn’t just conceal pain; it compounds it. It allows politicians to claim success while villages lack clean water, hospitals go underfunded, and urban workers juggle three jobs to stay afloat. It gives rise to resentment, to cynicism, to political alienation. And in the long run, it corrodes the social contract.
That is why the answer must be structural and urgent. Indonesia must build a truly independent data authority, one that treats statistics not as a branding exercise but as public infrastructure. This body would be protected by law, funded independently, and led by professionals with fixed terms, immune to ministerial whims. The Philippines Statistics Authority (PSA) offers a regional example: integrated across agencies, governed by statute, and bound to international best practices.
Second, governance must be shared, among civil society, academia, policymakers, and the private sector, ensuring no single actor, especially not the executive, can steer the data unilaterally. The UK Statistics Authority’s interventions doctrine allows it to publicly correct misuse of data, and that model should be emulated.
Finally, methodology must be transparent. Deflators, seasonal adjustments, survey sample frames, all must be disclosed. This not only prevents errors but allows researchers and media to audit the numbers in real time, reinforcing democratic oversight.
Encouragingly, Indonesia may be awakening to this need. In late 2024, BPS proposed legislative reform to unify statistical mandates and modernize its toolkit. This is a start. But it must go further. Legal insulation, accountability mechanisms, and international harmonization are non-negotiable if Indonesia wants credibility in a volatile world.
Economic growth is not a theatre production. It is a composite of thousands of lives, choices, investments, failures, and recoveries. To dress it up for applause is to mock the very people it is meant to represent.
Numbers must serve policy, not power. Data must mirror society, not the palace. Until Indonesia embraces that principle, it risks losing far more than reputation. It risks losing touch with reality itself.
Omong-Omong Media’s editorial is also published in The Jakarta Post every Monday.
