Indonesia is an emerging economic powerhouse. It is the largest economy in ASEAN, and is the only G20 member state from the region. Its GDP has grown an impressive six-fold since 2000, and is expected to grow by 5% per year on average over the next 5 years. In 2019, Indonesia’ Gross National Income per capita surpassed the World Bank’s threshold of US$4,050; it officially became an upper-middle income country in July 2020. The economic slowdown due to the pandemic resulted in reclassification to lower-middle income country in 2021. However, this is expected to be temporary with the Indonesian economy expected to have a strong rebound.
Domestic demand will continue growing driven by its 270 million population, and rising income. President Widodo has brought political stability since he was elected in 2014. Attracting foreign investors is a key element of his economic strategy. His initiatives include opening more sectors to foreign investment, improving critical infrastructure and increasing the ease of doing business in the country. Indonesia also has an abundance of natural resources. The 13,000-island archipelago is an incredibly bio-diverse country. It has the 3rd largest tropical rainforests which support its timber industry; is rich in energy and mineral resources, and has massive plantations for spices, rubber, palm oil, and other commodities.
Indonesia’s technological progress is impressive, and is expected to help turbo-charge the economy. Investments in 5G and IoT will improve connectivity. Cloud services are expected to increase, led by top global players such as Alibaba, Google and AWS. These will transform how industries operate, and usher further digital transformation across sectors.
ASEAN Business Partners is here to support you to realize the opportunities that Indonesia presents.