In the first quarter of 2025, the economy of Sumatera Utara (Sumut) experienced a contraction of 0.99 percent quarter-to-quarter (q-to-q), according to the latest report from the Central Statistics Agency (BPS). The Gross Regional Domestic Product (GRDP) was recorded at Rp296.49 trillion at current prices (ADHB) and Rp159.95 trillion at constant prices (ADHK). Despite this quarterly decline, the region saw a year-on-year (y-o-y) growth of 4.67 percent.
Misfarudin, a leading statistician at BPS Sumut, explained that the contraction was primarily driven by significant downturns in several business sectors. The most notable decline was in the construction sector, which saw a contraction of 8.01 percent. Other services also faced challenges, contracting by 7.67 percent, while the accommodation and food and beverage sector dropped by 6.75 percent. "The first quarter of this year has shown slower growth compared to the same period last year, although some categories still reported positive growth," Misfarudin stated during the economic growth release on May 5, 2025.
When comparing the first quarter of 2025 to the same period in 2024, transportation and warehousing emerged as the highest growth sector, achieving an impressive 12.13 percent growth y-o-y. This was closely followed by business services, which grew by 10.27 percent, and government administration, defense, and mandatory social security, which saw a growth of 9.85 percent.
Overall, Misfarudin highlighted that all categories experienced positive growth when compared year-on-year. The agriculture sector was the standout performer, contributing significantly to the region's economic growth, with a share of 25.46 percent. This was followed by trade at 18.68 percent and the processing industry at 18.47 percent. Together, agriculture, trade, processing, and construction accounted for a substantial 74.78 percent of Sumut's economic output.
On the expenditure side, the government consumption expenditure component (PK-P) faced the deepest contraction, declining by 16.95 percent. In contrast, the transportation and warehousing sector recorded the highest growth in production, at 12.13 percent. Additionally, the export of goods and services component also showed robust growth, increasing by 13.88 percent.
Despite the challenges faced in the first quarter, the overall economic outlook for Sumut remains cautiously optimistic. The region's ability to maintain a positive y-o-y growth rate indicates resilience amidst the economic slowdown. Misfarudin noted that while there were contractions in various sectors, the diversity of growth sources, especially in agriculture and transportation, provides a foundation for potential recovery.
As the year progresses, stakeholders in Sumut will be keenly observing how the economic landscape evolves, particularly in light of government policies aimed at stimulating growth and addressing the challenges faced by key sectors. The focus will likely be on enhancing infrastructure, supporting local businesses, and boosting consumer confidence to navigate the economic headwinds.
In summary, while the first quarter of 2025 presented significant challenges for Sumut's economy, the year-on-year growth figures and the strong performance of the agriculture and transportation sectors offer a glimmer of hope. With strategic planning and support, the region may well rebound from this contraction, paving the way for a more robust economic future.
