Indonesia / Economy of Indonesia

Indonesia Business Guide

Few companies with Indonesian capital operate in Turkey, and over 30 Turkish capital companies operate in Indonesia

Major Trading Partners:

China, Japan, Singapore, USA, South Korea, India, Malaysia,

Main Export Items:

Coal, Palm oil, Liquefied Natural Gas / Natural Gas, Natural Rubber, Gold Ore, Textile Products, Shoes, Pulp and Paper

Main Import Items:

Petroleum Oils, Components and Parts of Telephones, Wheat, Gold Ore, Soybeans, Sugar, Butane, Propane.

The Indonesian administration has announced a total of 16 “Economic Revitalization Packages” since September 2015 In order to improve the economic outlook of Indonesia, with the aim to eliminate legal uncertainties and attract foreign direct investment, primarily for infrastructure.

Its economy is largely based on exports of oil, natural gas and raw materials. That being said, the livelihood of the vast majority of the people of Indonesia is agriculture, livestock and fisheries and service sectors.

Indonesia is the world’s largest coconut producer, second largest palm oil producer, third largest cocoa, fourth largest coffee, and fifth largest tobacco and tea producer. Rubber and spice production is also significantly high in the country.

Forestry is an important source of foreign currency for Indonesia. It is the richest country of South-East Asia in terms of forest. Indonesia’s mineral resources are also very rich. It is one of the biggest tin producers of the world.

Bauxite, copper, nickel, gold and silver are other important minerals extracted. There has also been a growth in the operation of coal mines in recent years. It is the biggest coal exporter of the world.

Textile and garment industry has an important place in exports of the country.

32% of its workforce is employed within the agricultural sector. It has more than 7.7 million hectares of unprocessed soil available. However, there is low efficiency.

13% of its workforce is employed in the manufacturing sector. Foreign investors have built several billion dollar oil refineries and a large steel mill in recent years.

Mining production is expected to develop in the long run. 20% of world nickel production and 10% of aluminum production are being carried out in Indonesia.

Key Economic Indicators

 2005201020152016201720182019
Development of GDP (Billion $)311755861932101510221112
Development of GDP Per Capita (Dollars)1404317833683606388538714164
Current Balance (Million Dollars)2900-32007900530316952-31051-31752
Unemployment Rates (%)11,27,16,25,65,55,35,2
Average Consumer Inflation10,55,16,43,53,83,23,2
Public Revenues / GDP%17,915,614,914,314,114,914,4
Public Expenditures / GDP%17,416,917,516,816,616,616,3
Budget balance/GDP (%)0,6-1,5-2,7-2,5-2,4-1,7-1,9
Public Debt Stock / GDP%42,624,527,92829,430,130,3

Weaknesses in terms of Economy:

• Fragility against exchange rate fluctuations and external shocks,
• Deficiencies in its infrastructure, compared to the countries in the region such as Malaysia and Thailand,
• Excessive export dependence on commodity exports, especially to China,
• High degree of income inequality, • Short-term risk level is 1 and it corresponds to low level of risk, • Holding a medium – term credit rating at B.

Strengths in terms of Economy:

• Young and crowded population,
• Rich natural resources,
• Disciplined fiscal policies,
• Low public debt,
• Global financial crisis-resistant banking system,
• Stable international relations

Major Products in Indonesia’s Exports

Major Countries to Which Indonesia Exports

ChinaSingaporeJapan
IndiaPhilippinesMalaysia
KoreaThe NetherlandsThailand
TaiwanAustraliaVietnam
GermanySpainPakistan
Hong KongBangladeshItaly
USA  

Major Countries from which Indonesia Imports

ChinaSingaporeJapan
MalaysiaThailandUSA
KoreaAustraliaIndia
S. ArabiaGermanyVietnam
TaiwanUAEBrazil
CanadaHong KongRussia
Nigeria France 

The free trade area established between ASEAN Countries is a factor that increases the trade among these countries. Within the above mentioned free trade area, Indonesia has mutually eliminated customs duties in trade with other ASEAN countries.

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