General Economic Outline of Indonesia

Prudent financial macroeconomic policy is one reason why Indonesia was resilient to the global financial crisis of 2008-2009. Both public and private debt have fallen sharply (as a percentage of GDP), international reserves have grown fast and inflation has been under control. In combination with relative political stability and certain favorable demographic trends it provides opportunities for strong economic performance over the medium term. Regarding the longer term, the Indonesian government aims to be in the top six of largest global economies by the year 2030.

Another key element that accounts for Indonesia’s recent economic growth is domestic consumption. In line with rising per capita GDP and low borrowing costs, Indonesia’s private consumption is robust. It accounted for 56 percent of the country’s economic activity in 2011 and future projections indicate that it is to grow further.

Despite such positive conditions Indonesia remains a complex country from a business, social and political perspective. We advise those that intend to invest in Indonesia to read our Risks of Investing in Indonesia page as one should be aware of matters that can negatively influence Indonesia’s investment climate.

The table below shows recent results and future forecasts of important macroeconomic indicators. For a more detailed account on these indicators please visit the Macroeconomic Indicators page or click on the links in the table.

LAST UPDATE: 11 JANUARY 2016
  2009   2010   2011   2012    2013    2014    2015
• Gross Domestic Product
(annual percent change)
   4.6    6.4    6.2    6.0     5.6     5.0     4.7¹
• Consumer Price Index
(annual percent change)
   4.8    5.1    5.4    4.3     8.4     8.4     3.4
• Public Debt
(percent of GDP)
  28.6   27.4   26.6   27.3    28.7    24.7    27.0
• Exchange Rate
(IDR/USD)
10,389  9,074  8,773  9,419  11,563  11,800  13,400¹
 Current Account Balance
(percent of GDP)
   0.7    0.2   -2.8    -3.3    -2.9    -2.5¹
 Export Goods and Services
(annual percent change)
  14.9   13.6    2.0     5.3     1.0    -0.7¹
 Import Goods and Services
(annual percent change)
  17.3   13.3    6.6     1.2     2.2    -5.7¹
• Population
(in millions)
  241   244   247    250    253    255¹
• Poverty
(percent of population)
  14.2   13.3   12.5   11.7    11.5    11.0    11.1
• Unemployment
(percent of work force)
   7.9    7.1    6.6    6.1     6.3     5.9
• Foreign Exchange Reserves
(in billion USD)
  66.1   96.2  110.1  112.8    99.4   111.9   105.9

¹ indicates a forecast
Sources: World Bank, Statistics Indonesia, Bank Indonesia and International Monetary Fund (IMF)

COMPOSITION OF INDONESIA’S ECONOMY: THE THREE MAIN SECTORS

The table below indicates a remarkable development during the last five decades in the percentage shares of the three main economic sectors (to wit agriculture, industry and services) with regard to Indonesia’s Gross Domestic Product (GDP). Indonesia changed from being an economy that was highly dependent on agriculture into a more balanced economy in which the percentage share of manufacturing in the country’s GDP quickly exceeded that of the agriculture sector. This also indicates that Indonesia lessened its traditional dependency on primary exports, although it still remains relatively high today. It should also be underlined that all of these sectors underwent rapid expansion, despite the fact that its contribution to Indonesia’s GDP fell (agriculture) or remained at a similar level throughout the indicated period (the services sector). For a more detailed account please click on one of the sectors in the table below.

  1965   1980   1996   2010
 Agriculture
(percent of GDP)
    51     24     16     15
 Industry
(percent of GDP)
    13     42     43     47
 Services
(percent of GDP)
    36     34     41     37

Source: World Bank

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