SafekipediaEconomy of Indonesia
Adapted from Wikipedia · Discoverer experience
Indonesia has a mixed economy with some dirigiste features. It is one of the world's emerging market economies and the largest in Southeast Asia. As an upper-middle income country and a member of the G20, Indonesia is seen as a newly industrialized country. It has the 17th largest economy in the world by nominal GDP and the 7th largest in terms of GDP (PPP).
The country depends on its domestic market, government spending, and state-owned enterprises. These state-owned companies have assets worth over 1 trillion USD as of 2024. The government also controls prices for basic goods like rice and electricity, which helps keep them affordable for people.
After facing a big financial crisis in 1997, Indonesia went through a tough time but recovered. The economy grew quickly in the early 2000s. However, it faced a recession in 2020 because of the COVID-19 pandemic, with growth dropping to −2.07%. Recently, the manufacturing sector, which used to help the economy grow, has lost many jobs, with about 300,000 jobs gone since 2023.
History
Main article: Economic history of Indonesia
Sukarno era
See also: Benteng program
After Indonesia declared independence, the country faced big problems. Fights with the Dutch and rule by Japan had hurt its economy. Important things like rubber and oil were being sold much less than before. In 1946, the country started its own bank, called the Bank Negara Indonesia. This bank made its own money, called ORI. But because it was easy to copy, this made things worse. Between 1949 and 1960, Indonesia went through many changes like becoming fully independent and taking over some companies from the Dutch. These changes caused more economic problems.
In the 1960s, the economy got much worse because of political problems. The government didn’t know how to manage money well, which caused hunger and poverty. By the mid-1960s, prices were rising very fast, exports were falling, and factories were not working well.
New Order
See also: Five-Year Development Plans, Berkeley Mafia, and Gang of Four (Indonesia)
After President Sukarno left, new leaders brought more order to the economy. They lowered prices, stabilized money, and brought in help and investments from other countries. In the 1970s, oil prices went up, which helped Indonesia grow quickly. But later, as oil prices fell, growth slowed. New rules were added to help the economy, and foreign investments grew, especially in making things for export.
However, there were big problems like corruption, weak government systems, and misuse of natural resources. In the 1990s, a big crisis hit Asia. Indonesia’s money lost value very fast, and many people lost jobs. The leader at the time had to leave because of protests. New leaders worked to fix the economy, but it was very hard.
Reform era
Since 2000, Indonesia has worked to control prices and improve its economy. Even with some ups and downs, growth has been steady. In 2007, the economy grew very well, helping to reduce poverty. Indonesia did not suffer as much as other countries during the global economic problems because its economy depends more on local spending.
The COVID-19 pandemic in 2020 caused a big drop in Indonesia’s economy, but by 2021 it began to recover. New leaders are trying to grow the economy even more with big plans, but they also face challenges like public unrest and problems with certain groups affecting businesses. The country’s money, the rupiah, has also gone up and down a lot in value over the years.
| Share of world GDP (PPP) | |
|---|---|
| Year | Share |
| 1980 | 1.24% |
| 1990 | 1.68% |
| 2000 | 1.7% |
| 2010 | 2.07% |
| 2020 | 2.31% |
| 2025 | 2.42% |
Data
The following table shows the main economic indicators from 1980 to 2024. Some values for the years 2025 to 2030 are estimates. Inflation rates below 5% are shown in green.
Grey colors are estimations.
| Year | GDP (in Bil. US$PPP) | GDP per capita (in US$ PPP) | GDP (in Bil. US$nominal) | GDP per capita (in US$ nominal) | GDP growth (real) | Inflation rate (in Percent) | Unemployment (in Percent) | Government debt (in % of GDP) |
|---|---|---|---|---|---|---|---|---|
| 1980 | 189.7 | 1,286.3 | 99.3 | 673.2 |  9.9% |  18.0% | n/a | n/a |
| 1981 | 223.4 | 1,485.6 | 110.8 | 737.0 | 7.6% | 12.2% | n/a | n/a |
| 1982 | 242.6 | 1,581.6 | 113.8 | 741.9 | 2.2% | 9.5% | n/a | n/a |
| 1983 | 262.7 | 1,679.3 |  103.1 | 659.5 | 4.2% | 11.8% | n/a | n/a |
| 1984 | 292.7 | 1,835.4 | 107.2 | 672.2 | 7.6% | 10.5% | 1.6% | n/a |
| 1985 | 313.8 | 1,929.2 | 107.1 | 658.2 | 3.9% | 4.7% | 2.2% | n/a |
| 1986 | 343.1 | 2,068.7 | 101.2 | 610.2 | 7.2% | 5.8% | 2.8% | n/a |
| 1987 | 374.7 | 2,215.4 | 95.2 | 562.9 | 6.6% | 9.3% |  2.6% | n/a |
| 1988 | 415.0 | 2,406.0 | 107.3 | 621.9 | 7.0% | 8.1% | 2.9% | n/a |
| 1989 | 470.5 | 2,674.6 | 122.6 | 696.9 | 9.1% | 6.4% |  2.9% | n/a |
| 1990 | 532.0 | 2,965.9 | 138.3 | 770.8 | 9.0% | 7.8% | 2.6% | n/a |
| 1991 | 599.1 | 3,285.4 | 154.6 | 847.6 | 8.9% | 9.4% | 2.7% | n/a |
| 1992 | 652.7 | 3,521.1 | 168.3 | 907.8 | 6.5% | 7.5% | 2.8% | n/a |
| 1993 | 721.4 | 3,827.8 | 190.9 | 1,013.1 | 8.0% | 9.7% | 2.8% | n/a |
| 1994 | 792.3 | 4,135.8 | 213.7 | 1,115.6 | 7.5% | 8.5% | 4.5% | n/a |
| 1995 | 875.4 | 4,495.1 | 244.2 | 1,254.0 | 8.2% | 9.4% | 7.4% | n/a |
| 1996 | 961.2 | 4,878.9 | 274.7 | 1,394.5 | 7.8% | 8.0% | 5.0% | n/a |
| 1997 | 1,023.7 | 5,136.9 | 260.7 | 1,308.1 | 4.7% | 6.2% | 4.8% | n/a |
| 1998 | 899.3 | 4,461.3 | 115.3 | 572.1 | -13.1% | 58.4% | 5.5% | n/a |
| 1999 | 919.2 | 4,507.9 | 169.2 | 829.6 | 0.8% | 20.5% | 6.4% | n/a |
| 2000 | 986.8 | 4,784.3 | 179.5 | 870.2 | 5.0% | 3.7% | 6.1% | 87.4% |
| 2001 | 1,045.8 | 4,999.0 | 174.5 | 834.1 | 3.6% | 11.5% | 8.1% | 73.7% |
| 2002 | 1,109.9 | 5,230.8 | 212.8 | 1,002.9 | 4.5% | 11.9% | 9.1% | 62.3% |
| 2003 | 1,185.9 | 5,510.4 | 255.4 | 1,186.8 | 4.8% | 6.8% | 9.7% | 55.6% |
| 2004 | 1,279.0 | 5,859.4 | 279.6 | 1,280.7 | 5.0% | 6.1% | 9.9% | 51.3% |
| 2005 | 1,394.2 | 6,297.4 | 310.8 | 1,403.9 | 5.7% | 10.5% | 11.2% | 42.6% |
| 2006 | 1,516.3 | 6,752.5 | 396.3 | 1,764.8 | 5.5% | 13.1% | 10.3% | 35.8% |
| 2007 | 1,656.1 | 7,271.3 | 470.1 | 2,064.2 | 6.3% | 6.3% | 9.1% | 38.1% |
| 2008 | 1,813.5 | 7,850.3 | 558.6 | 2,418.0 | 7.4% | 9.9% | 8.4% | 30.3% |
| 2009 | 1,910.9 | 8,155.8 | 577.5 | 2,465.0 | 4.7% | 4.8% | 7.9% | 26.5% |
| 2010 | 2,057.2 | 8,656.8 | 755.3 | 3,178.1 | 6.4% | 5.1% | 7.1% | 24.5% |
| 2011 | 2,229.5 | 9,213.2 | 892.6 | 3,688.5 | 6.2% | 5.3% | 6.6% | 23.1% |
| 2012 | 2,413.4 | 9,833.7 | 919.0 | 3,744.5 | 6.0% | 4.0% | 6.1% | 23.0% |
| 2013 | 2,535.0 | 10,188.3 | 916.6 | 3,684.0 | 5.6% | 6.4% | 6.3% | 24.9% |
| 2014 | 2,622.3 | 10,399.0 | 891.1 | 3,533.6 | 5.0% | 6.4% | 5.9% | 24.7% |
| 2015 | 2,647.7 | 10,359.3 | 860.7 | 3,367.7 | 4.9% | 6.4% | 6.2% | 27.0% |
| 2016 | 2,744.9 | 10,618.7 | 932.1 | 3,605.7 | 5.0% | 3.5% | 5.6% | 28.0% |
| 2017 | 2,894.1 | 11,073.5 | 1,015.5 | 3,885.5 | 5.1% | 3.8% | 5.5% | 29.4% |
| 2018 | 3,116.6 | 11,798.0 | 1,042.7 | 3,947.2 | 5.2% | 3.3% | 5.2% | 30.4% |
| 2019 | 3,266.2 | 12,236.9 | 1,119.1 | 4,192.8 | 5.0% | 2.8% | 5.2% | 27.0% |
| 2020 | 3,223.4 | 11,929.5 | 1,059.1 | 3,919.5 | -2.1% | 2.0% | 7.1% | 36.1% |
| 2021 | 3,530.6 | 12,947.9 | 1,186.5 | 4,351.3 | 3.7% | 1.6% | 6.5% | 37.9% |
| 2022 | 3,983.1 | 14,446.1 | 1,319.1 | 4,784.2 | 5.3% | 4.1% | 5.9% | 37.3% |
| 2023 | 4,334.8 | 15,553.7 | 1,371.2 | 4,919.9 | 5.0% | 3.7% | 5.3% | 36.9% |
| 2024 | 4,662.9 | 16,558.3 | 1,396.3 | 4,958.4 | 5.0% | 2.3% | 4.9% | 37.7% |
| 2025 | 5,009.5 | 17,611.8 | 1,443.3 | 5,074.0 | 5.1% | 1.7% | 4.9% | 38.6% |
| 2026 | 5,358.2 | 18,656.9 | 1,535.1 | 5,398.0 | 5.1% | 2.5% | 5.1% | 38.8% |
| 2027 | 5,721.6 | 19,737.9 | 1,649.4 | 5,721.6 | 4.9% | 2.5% | 5.1% | 38.9% |
| 2028 | 6,130.1 | 20,959.1 | 1,779.0 | 6,130.1 | 5.0% | 2.5% | 5.1% | 39.0% |
| 2029 | 6,561.2 | 22,959.1 | 1,916.7 | 6,497.2 | 5.1% | 2.5% | 5.0% | 39.0% |
| 2030 | 7,027.1 | 23,626,1 | 2,065.5 | 6,944.5 | 5.1% | 2.5% | 5.0% | 39.0% |
Structure
Indonesia's economy in 2023 was measured by the total value of goods and services produced, called Gross Domestic Product (GDP). This value was IDR 20,892.4 trillion. The fastest-growing part of the economy was Transportation and Storage, which grew by 13.96%.
Different parts of Indonesia grew at different speeds. The areas with the fastest growth were Maluku and Papua, Sulawesi, and Kalimantan, with growth rates of 6.94%, 6.37%, and 5.43% respectively. Java Island, which makes up more than half of the country's economy (57.05%), grew at a rate of 4.96%.
| Composition | Sector | 2022 output | 2023 output | Constant Growth | Contribution to 2023 output | |
|---|---|---|---|---|---|---|
| (trillion rupiahs) | ||||||
| Agriculture | Agriculture | 2,428.9 | 2,617.7 | 1.30% | 12.53% | 12.53% |
| Industrial | Mining and Quarrying | 2,393.4 | 2,198.0 | 6.12% | 10.52% | 40.18% |
| Manufacturing | 3,591.8 | 3,900.1 | 4.64% | 18.67% | ||
| Electricity and Gas | 204.7 | 218.2 | 4.91% | 1.04% | ||
| Water | 12.5 | 13.3 | 4.90% | 0.06% | ||
| Construction | 1,913.0 | 2,072.4 | 4.85% | 9.92% | ||
| Services | Wholesale and Retail Trade | 2,516.7 | 2,702.4 | 4.85% | 12.94% | 42.91% |
| Transportation and Storage | 983.5 | 1,231.2 | 13.96% | 5.89% | ||
| Accommodation and Food Services | 472.0 | 526.3 | 10.01% | 2.52% | ||
| Information and Communication | 812.7 | 883.6 | 7.59% | 4.23% | ||
| Financial and Insurance Activities | 809.4 | 869.2 | 4.77% | 4.16% | ||
| Real Estate | 488.3 | 505.5 | 1.43% | 2.42% | ||
| Business Activities | 341.4 | 383.1 | 8.24% | 1.83% | ||
| Public Administration and Defense | 604.9 | 616.4 | 1.50% | 2.95% | ||
| Education | 566.5 | 583.6 | 1.78% | 2.79% | ||
| Human Health and Social Work | 236.2 | 252.0 | 4.66% | 1.21% | ||
| Other Services | 354.2 | 405.2 | 10.52% | 1.94% | ||
| Tax Less Subsidies | 858.0 | 914.2 | 4.94% | 4.38% | 4.38% | |
| Indonesia | Total | 19,588.1 | 20,892.4 | 5.05% | 100.00% | 100.00% |
Sectors
Agriculture, aquaculture and forestry
Main articles: Agriculture in Indonesia, Aquaculture in Indonesia, and Deforestation in Indonesia
See also: Rice production in Indonesia, Banana production in Indonesia, Coconut production in Indonesia, Coffee production in Indonesia, Palm oil production in Indonesia, Peanut production in Indonesia, and Tea production in Indonesia
Agriculture is an important part of Indonesia's economy. It helps create jobs for many people and makes up about 14% of the country's total income. Many farms grow rice, corn, peanuts, rubber, cocoa, coffee, and palm oil. Palm oil is very important because Indonesia makes more of it than any other country in the world. Fish and seafood are also big parts of the economy, with Indonesia being one of the top seafood producers.
Seafood
In 2015, Indonesia produced a lot of seafood, worth about 18 billion US dollars. Fishing in the wild has stayed steady, but farming fish (aquaculture) has grown a lot. Indonesia is the second biggest seafood producer after China.
Palm Oil
Palm oil is very important for Indonesia. The country makes more palm oil than any other place in the world, about half of all the palm oil used globally. In 2016, Indonesia made over 34 million metric tons of palm oil. This helps the economy and provides jobs for millions of people. Efforts are being made to make palm oil production better for the environment and workers.
Coconut
18.5 million tons of coconut is produced each year in Indonesia, making it the largest producer in the world. Coconut is important in Indonesian culture and traditions, often called “The Tree of Life” for its many uses.
Industry
Oil, gas and mining
Main articles: Bauxite mining in Indonesia, Coal mining in Indonesia, Copper mining in Indonesia, Nickel mining in Indonesia, and Tin mining in Indonesia
See also: List of mines in Indonesia and List of gas fields in Indonesia
Indonesia used to be a member of a group of oil countries but is now more of an importer. The oil and gas industry used to be a big part of the economy, but it has gone down because of older oil fields and less investment. Mining also includes coal, copper, nickel, and gold, with Indonesia being a top producer of some of these minerals.
Energy
Main article: Energy in Indonesia
See also: Renewable energy in Indonesia
Indonesia has a lot of potential for clean energy but still uses a lot of coal for electricity. There are efforts to use more renewable energy, but progress is slow.
Construction
See also: List of main infrastructure projects in Indonesia
In 2023, construction added about 10% to Indonesia's economy. Big government projects and partnerships are helping build new roads, trains, and cities.
Manufacturing
Manufacturing is a big part of Indonesia's economy, making up about 20% of the total. Factories make clothes, food, electronics, cars, and chemicals. The government wants to make Indonesia one of the world's top economies by focusing on manufacturing. There are many small and medium-sized factories, and the sector is growing.
Automotive
Main article: Automotive industry in Indonesia
In 2010, Indonesia sold millions of motorcycles, most made locally. Car sales have also grown a lot, with brands like Toyota and Daihatsu being popular. Indonesia has been making more cars and exporting some to other countries.
Defense
Indonesia makes its own defense equipment to be ready for any threats and create jobs. Companies focus on making weapons, ships, and aircraft. There are plans to build new aircraft and work with other countries on defense projects.
Pulp and paper
Main article: Pulp and paper industry in Indonesia
Services
Finance and banking
See also: List of banks in Indonesia, Indonesian regional development bank, List of Indonesian exchange-traded funds, and Islamic banking
Indonesia has many small businesses, and the internet is growing fast. Financial services are important, with many banks and companies helping people and businesses manage money.
Education
Main article: Education in Indonesia
Healthcare
Main article: Healthcare in Indonesia
Housing and real estate
Water supply and sanitation
Main article: Water supply and sanitation in Indonesia
Retail
See also: List of supermarket chains in Indonesia and Category:Indonesian brands
Telecommunications
Main articles: Telecommunications in Indonesia and Internet in Indonesia
Transport
Main article: Transport in Indonesia
See also: Rail transport in Indonesia, Aviation in Indonesia, and List of ports in Indonesia
Tourism
Main article: Tourism in Indonesia
Foreign labor
In 2011, Indonesia gave work permits to thousands of foreigners. Many Indonesians also work in other countries, especially in Malaysia and Saudi Arabia, sending money back home.
Science and technology
Main article: Science and technology in Indonesia
See also: Bandung High Tech Valley and Bandung Techno Park
Regional economies
GDP by provinces
Main articles: List of Indonesian provinces by GDP, List of Indonesian provinces by GDP per capita, List of Indonesian cities by GDP, and List of Indonesian regencies by GDP
Indonesia has 34 provinces. Here are the top 15 provinces ranked by their total money made, or GDP, in 2019:
| Rank | Province | Region | GDP (in billion Rp) | GDP nominal | GDP PPP |
|---|---|---|---|---|---|
| (in billion $) | (in billion $) | ||||
| - |  Indonesia | South East Asia | 16,073,257 | 1,136.72 | 3,329.17 |
| 1 |  Jakarta | Java | 2,840,828 | 200.91 | 588.42 |
| 2 |  East Java | Java | 2,352,425 | 166.37 | 487.27 |
| 3 |  West Java | Java | 2,125,158 | 150.30 | 440.19 |
| 4 |  Central Java | Java | 1,362,457 | 96.35 | 282.18 |
| 5 |  North Sumatra | Sumatra | 801,733 | 56.70 | 166.06 |
| 6 |  Riau | Sumatra | 765,198 | 54.12 | 158.51 |
| 7 |  Banten | Java | 664,963 | 47.03 | 137.74 |
| 8 |  East Kalimantan | Kalimantan | 653,677 | 46.23 | 135.40 |
| 9 |  South Sulawesi | Sulawesi | 504,747 | 35.70 | 104.56 |
| 10 |  South Sumatra | Sumatra | 455,233 | 32.19 | 94.28 |
| 11 |  Lampung | Sumatra | 360,664 | 25.51 | 74,71 |
| 12 |  Riau Islands | Sumatra | 268,080 | 18.96 | 55.53 |
| 13 |  Bali | Lesser Sunda Islands | 252,598 | 17.86 | 52.31 |
| 14 |  West Sumatra | Sumatra | 246,423 | 17.42 | 51.01 |
| 15 |  Jambi | Sumatra | 217,712 | 15.40 | 45.10 |
Foreign economic relations
Trade statistics
ASEAN
Until the end of 2010, trade within ASEAN was still low, mostly involving exports to countries outside the region, except for Laos and Myanmar, whose trade was focused on ASEAN. In 2009, foreign direct investment was US$37.9 billion and doubled to US$75.8 billion in 2010.
The ASEAN Framework Agreement on Trade in Services was adopted in Bangkok in December 1995. Under this agreement, member states negotiate to make trade in services easier, aiming for higher levels of commitment. ASEAN has concluded seven sets of commitments under this agreement.
Mutual Recognition Agreements have been made for eight professions: physicians, dentists, nurses, architects, engineers, accountants, surveyors, and tourism professionals. People in these jobs can work in any ASEAN country starting December 31, 2015.
Six member states — Malaysia, Vietnam, Indonesia, the Philippines, Thailand, and Singapore — have worked together to connect their stock markets, including 70% of transaction values, to compete with international markets.
The Single Market will also include the ASEAN Single Aviation Market, a policy to develop a unified aviation market in Southeast Asia. It was suggested by the ASEAN Air Transport Working Group, supported by senior transport officials, and approved by transport ministers. This policy aims to make air travel easier between member states, helping airlines grow and boosting tourism, trade, investment, and services. It replaces older agreements that don’t match its rules.
Japan
Indonesia and Japan signed an economic partnership agreement that started on July 1, 2008. This was Indonesia’s first agreement to make it easier to move goods, people, and investments between the two countries. In 2012, there were about 1,200 to 1,300 Japanese companies in Indonesia, with around 12,000 Japanese people living there. Japan has invested in Indonesia for many years, especially in cars, electronic goods, energy, and mining. Before Indonesia became a country, Japan saw it as a source of natural resources. Japan needed these resources as a reason to move south during World War II. Today, Indonesia supplies Japan with natural rubber, liquefied natural gas, coal, minerals, paper pulp, seafood like shrimp and tuna, and coffee. Indonesia is also a big market for Japanese cars and electronic goods. For Japanese businesses, Indonesia is a place to make things cheaply and get natural resources. About 1,000 Japanese companies employ around 300,000 people in Indonesia. Many big Japanese factories are east of Jakarta, especially in Bekasi, Cikarang, and Karawang in West Java.
China
Trade with China has grown since the 1990s, and in 2014, China became Indonesia’s second-biggest export destination after Japan. Trade between China and Indonesia has increased, especially after the ACFTA agreement in early 2010. In 2003, trade was US$3.8 billion, but by 2010, it was almost ten times higher at US$36.1 billion. China’s fast growth has led to more foreign investments in the bamboo network, a group of overseas Chinese businesses in Southeast Asia with family and cultural ties. However, free trade with China has caused worry in Indonesia because cheap products from China might hurt Indonesian industry. Indonesian businesses and groups have asked the government to either leave the agreement or change its terms with China.
China is now Indonesia’s biggest export and import market. China is Indonesia’s largest export destination, reaching US$16.8 billion. China is also Indonesia’s most important source of imports, reaching US$30.8 billion, which is 22.7% of Indonesia’s imports in 2016. However, China had more, with Indonesia having a trade deficit of US$14 billion in 2016.
For China, ASEAN as a whole became its fourth-largest trading partner after the European Union, Japan, and the United States. Among ASEAN countries, Indonesia was China’s fourth-largest partner, with trade worth US$12.4 billion as of May 2010, after Malaysia, Singapore, and Thailand. With China’s growing economy, Indonesia has been strengthening its trade ties with China to balance its relationships with the West. By 2020, China had become Indonesia’s largest export destination.
South Korea
In the past, relations were mainly about trade and investments, like forestry and garments. Now, cooperation includes big projects and advanced industries. With US$27 billion in trade, South Korea became Indonesia’s fourth-largest partner in 2012 and its third-largest investor, with US$1.94 billion invested.
Many South Korean companies operate in Indonesia, such as Miwon (Daesang Corporation), Lotte, Yong Ma, Hankook, Samsung, LG, Kia, and Hyundai. In 2011, Hankook planned to invest US$353 million in a plant in Bekasi, West Java. In 2019, trade between the two countries was worth $15.65 billion, and from 2015 to 2019, South Korean companies invested nearly $7 billion in Indonesia. In December 2020, Indonesia and South Korea signed a comprehensive economic partnership, similar to a free trade agreement but covering more areas. Under this deal, Indonesia will remove tariffs on 94.8% of South Korean products, and South Korea will remove tariffs on 95.8% of Indonesian products.
United States
At the start of the post-Suharto era, US exports to Indonesia in 1999 were $2 billion, much less than $4.5 billion in 1997. Main exports were construction equipment, machinery, aviation parts, chemicals, and farm products. US imports from Indonesia in 1999 were $9.5 billion, mostly clothing, machinery, transportation equipment, oil, natural rubber, and shoes. Financial help for Indonesia is organized through the Consultative Group on Indonesia, formed in 1989. It includes 19 donor countries and 13 international groups meeting each year to coordinate help. In 2019, when Indonesia’s share of global trade passed 0.5%, the United States decided not to call Indonesia a “developing country.” However, Indonesia said this wouldn’t change the special trade rules it had with the United States.
European Union
The EU and Indonesia have strong business ties, with two-way trade reaching about €25 billion in 2012, giving Indonesia a €5.7 billion surplus. Trade has grown from nearly €16 billion in 2009 to €23.5 billion in 2011. For the EU, Indonesia is the 24th largest source of imports and the 30th largest export market. In ASEAN, Indonesia is fourth in total trade. The EU is Indonesia’s second-largest investor. Indonesia mainly exports farm products, processed resources like palm oil, fuels, mining products, textiles, and furniture to the EU. The EU mainly exports high-tech machinery, transport equipment, chemicals, and manufactured goods to Indonesia. Trade between the two helps both sides. After talks on a free trade agreement with ASEAN became hard, the EU started talking with individual ASEAN countries. The EU and Indonesia are working on a big Comprehensive Economic Partnership Agreement covering trade, investment, and services.
India
On January 25, 2011, India and Indonesia signed business deals worth billions and aimed to double trade in five years. India also has economic ties with Indonesia through its free trade agreement with ASEAN, which includes Indonesia. The two countries aim for $25 billion in trade by 2015, with India investing $20 billion in Indonesia.
| Year | Goods exports (billion US$) | Goods imports (in billion US$) | Net trade (in billion US$) |
|---|---|---|---|
| 2023 | $257.7 | $211.5 | $46.2 |
| 2020 | $163.4 | $135.1 | $28.3 |
| 2015 | $149.1 | $135.1 | $14.1 |
| 2010 | $150.0 | $118.9 | $31.0 |
| 2000 | $65.4 | $40.4 | $25.0 |
| 1990 | $26.8 | $21.5 | $5.4 |
Free trade efforts
International trade agreements
Trade agreements under negotiation
- Indonesia–United States Free Trade Agreement
- Indonesia-Bangladesh Preferential Trade Agreement (Bangladesh)
- Indonesia-Mercosur Comprehensive Economic Partnership Agreement (Mercosur)
- Indonesia-GCC Free Trade Agreement (GCC); Negotiations launched: 1 January 2024
- Indonesia-Mauritius Preferential Trade Agreement (Mauritius)
- Indonesia-Pakistan Free Trade Agreement (Pakistan); Negotiations launched: January 2019
- Indonesia-Sri Lanka Preferential Trade Agreement (Sri Lanka); Negotiations launched: 1 January 2024
- Indonesia-Turkey Preferential Trade Agreement (Turkey); Negotiations launched: 6 July 2017
- Indonesia-Tunisia Preferential Trade Agreement (Tunisia); Negotiations launched: 25 June 2018
| Economy | Agreement | Abbreviation | Negotiations Launched | Signed | Effective | Legal text |
|---|---|---|---|---|---|---|
 Australia | Indonesia–Australia Comprehensive Economic Partnership Agreement | IACEPA | 26 December 2012 | 4 March 2019 | 5 July 2020 | |
 Canada | Indonesia–Canada Comprehensive Economic Partnership Agreement | ICACEPA | 20 June 2021 | 2 December 2024 | ||
 Chile | Indonesia–Chile Comprehensive Economic Partnership Agreement | ICCEPA | May 2014 | 14 December 2017 | 8 October 2019 | |
 EAEU | Indonesia–EAEU Free Trade Agreement | IEAEUFTA | 3 April 2023 | 21 December 2025 | ||
 EFTA | Indonesia–EFTA Comprehensive Economic Partnership Agreement | IECEPA | 31 January 2011 | 16 December 2018 | 1 November 2021 | |
 EU | Indonesia–EU Comprehensive Economic Partnership Agreement | IEUCEPA | 18 July 2016 | 23 September 2025 | 1 January 2027 | |
 Iran | Indonesia–Iran Preferential Trade Agreement | IIPTA | 23 November 2023 | |||
 Japan | Indonesia–Japan Economic Partnership Agreement | IJEPA | 20 August 2007 | 20 August 2007 | 1 July 2008 | Wayback Machine |
 Mozambique | Indonesia–Mozambique Preferential Trade Agreement | IMPTA | April 2018 | 28 August 2019 | June 2022 | Wayback Machine |
 Pakistan | Indonesia–Pakistan Preferential Trade Agreement | IPPTA | 24 November 2005 | 3 February 2012 | 13 September 2013 | |
 Palestine | Indonesia–Palestine Trade Facilitation for Certain Products | 12 December 2017 | 25 April 2018 | |||
 Peru | Indonesia–Peru Comprehensive Economic Partnership Agreement | IPCEPA | 15 August 2023 | 11 August 2025 | ||
 South Korea | Indonesia–Korea Comprehensive Economic Partnership Agreement | IKCEPA | 12 July 2012 | 18 December 2020 | 1 January 2023 | |
 United Arab Emirates | Indonesia–UAE Comprehensive Economic Partnership Agreement | IUAECEPA | 1 July 2022 | 1 September 2023 | ||
 ASEAN | ASEAN Free Trade Area | AFTA | 28 January 1992 | 1 January 1993 | ||
Australia New Zealand | ASEAN–Australia–New Zealand Free Trade Area | AANZFTA | 21 February 2005 | 27 February 2009 | 1 January 2010 | |
 China | ASEAN–China Free Trade Area | ACFTA | 4 November 2000 | 29 November 2004 | 1 July 2005 | |
 Hong Kong | ASEAN–Hong Kong, China Free Trade Area | AHKFTA | 11 July 2014 | 12 November 2017 | 13 October 2019 | |
 India | ASEAN–India Free Trade Area | AIFTA | 7 March 2004 | 13 August 2009 | 1 January 2010 | |
| Japan | ASEAN–Japan Comprehensive Economic Partnership | AJCEP | 14 April 2005 | 14 April 2008 | 1 February 2009 | |
| South Korea | ASEAN–Korea Free Trade Area | AKFTA | 30 November 2004 | 24 August 2006 | 1 January 2010 | |
Indonesia Bangladesh Egypt Iran Malaysia Nigeria Pakistan Turkey | Preferential Tariff Arrangement-Group of Eight Developing Countries | PTA-D8 | 13 May 2006 | 25 August 2011 | ||
| ASEAN China Japan South Korea Australia New Zealand | Regional Comprehensive Economic Partnership | RCEP | 20 November 2012 | 3 November 2022 | 3 November 2022 | Wayback Machine |
 OIC | Trade Prefential System-Organisation of Islamic Conference | TPS-OIC | April 2004 | 1 January 2014 | 1 July 2022 |
Macro-economic trend
This section shows how Indonesia's economy has grown over time, using figures measured in rupiah.
The chart shows Indonesia's GDP at market prices, with numbers given in millions of rupiah.
When comparing the buying power of different countries, one US dollar is equal to 3,094.57 rupiah.
Wages in Indonesia differ depending on the job. In February 2017, people working in electricity, gas, and water had the highest average wages, while those in agriculture earned the least.
| Year | GDP | USD exchange (rupiah) | Inflation rate (%) | Nominal GDP per capita (as % of US) | GDP PPP per capita (as % of US) |
|---|---|---|---|---|---|
| 1980 | 60,143.191 | 627 | 18.0 | 3.90 | 5.93 |
| 1985 | 112,969.792 | 1,111 | 4.7 | 2.82 | 5.98 |
| 1990 | 233,013.290 | 1,843 | 7.8 | 2.45 | 12.90 |
| 1995 | 502,249.558 | 2,249 | 9.4 | 3.57 | 15.76 |
| 2000 | 1,389,769,700 | 8,396 | 3.8 | 2.15 | 13.05 |
| 2005 | 2,678,664,096 | 9,705 | 10.5 | 2.86 | 14.17 |
| 2010 | 6,422,918,230 | 8,555 | 5.1 | 6.44 | 17.54 |
| 2015 | 11,531,700,000 | 13,824 | 6.4 | 5.86 | 18.02 |
| 2020 | 15,434,200,000 | 14,105 | 1.7 | 6.35 | 18.89 |
Investment
Since the late 1980s, Indonesia has changed its rules to help the economy grow. Most of this growth came from private money, both from inside the country and from other countries. The United States put a lot of money into oil, gas, and big mining projects. After some big changes in the 1980s, more American banks, factories, and service companies started working in Indonesia. Other big investors included India, Japan, the United Kingdom, Singapore, the Netherlands, Qatar, Hong Kong, Taiwan, and South Korea.
A big problem happened in 1997, which made it harder to get private money. The number of new foreign investments dropped a lot between 1997 and 1999. This showed that Indonesia needed to fix some things, like making sure laws work well and following fair rules. Even though there have been some improvements, Indonesia still has problems protecting ideas and inventions. During the 1997 problem, many new projects stopped.
By June 2010, the Indonesia Stock Exchange had 341 companies worth about $269.9 billion. Most of this money came from foreign investors, and only a small part of Indonesia’s people owned stocks. Indonesia is trying to make it easier for businesses and investors. In 2010, Indonesia moved up in a list of how easy it is to do business, but it still has a lot of work to do.
From 1990 to 2010, Indonesian companies were part of many big business deals worth $137 billion. In 2010, there were 609 of these deals, which was a new high. In 2012, Indonesia got $32.5 billion in new investments, more than it had hoped. These investments went mostly into mining, transportation, and chemicals. In 2011, the government made a plan to get more money into big projects across the country.
Indonesia got its good investment rating back in 2011 and 2012 after losing it during the 1997 problem. In May 2017, another group raised Indonesia’s rating again because the economy was doing better.
Foreign Direct Investment (FDI)
In 2022, foreign money coming into Indonesia grew by 44.2%. The most money went to metal and mining projects. Singapore, China, and Hong Kong were the biggest sources of this money. In the first part of 2023, foreign investment reached a new high, with Singapore being the top source again. Indonesia aims to get even more investment in the future.
| Rank | Country | FDI 2022 in billion USD | FDI 2024 in billion USD | increase |
|---|---|---|---|---|
| 1 |  Singapore | $10.54 | $20.04 | 90.13% |
| 2 | Hong Kong | $3.91 | $8.22 | 110.23% |
| 3 | China | $5.18 | $8.11 | 56.56% |
| 4 | Malaysia | $2.21 | $4.24 | 91.86% |
| 5 |  United States | $2.12 | $3.70 | 74.53% |
| 6 | Japan | $2.76 | $3.46 | 25.36% |
| 7 | South Korea | $1.66 | $2.99 | 80.12% |
| 8 |  Netherlands | $1.09 | $1.98 | 81.65% |
| 9 |  British Virgin Islands | - | $0.78 |  |
| 10 |  United Kingdom | $0.51 | $0.75 | 47.06% |
| Total | $45.6 | $60.0 | 31.60% | |
Largest Indonesian companies
See also: List of largest companies in Indonesia
Fortune Global 500
Indonesia has 2 companies that are among the top in the Fortune Global 500 ranking for 2025.
Forbes Global 2000
Indonesia has 12 companies that are among the top in the Forbes Global 2000 ranking for 2025.
| World Rank | Company | Industry | Sales ($M) | Profits ($M) | Assets ($M) | Employees |
|---|---|---|---|---|---|---|
| 171 | Pertamina | Oil and gas | 75,327 | 3,126 | 89,850 | 43,998 |
| 469 | Perusahaan Listrik Negara | Utilities | 34,437 | 1,118 | 110,154 | 51,435 |
| World Rank | Company | Industry | Sales (billion $) | Profits (billion $) | Assets (billion $) | Market Value (billion $) |
|---|---|---|---|---|---|---|
| 349 | Bank Rakyat Indonesia | Banking | 16.07 | 3.80 | 123.83 | 33.48 |
| 408 | Bank Mandiri | Banking | 12.34 | 3.52 | 150.82 | 26.90 |
| 482 | Bank Central Asia | Banking | 7.64 | 3.50 | 92.62 | 62.99 |
| 1,003 | Telkom Indonesia | Telecommunications | 9.46 | 1.49 | 18.62 | 15.30 |
| 1,064 | Bank Negara Indonesia | Banking | 5.55 | 1.35 | 70.20 | 9.31 |
| 1,220 | Bayan Resources | Materials | 3.44 | 0.92 | 11.12 | 39.51 |
| 1,436 | Amman Mineral | Materials | 2.67 | 0.64 | 9.86 | 29.62 |
| 1,685 | Chandra Asri | Chemical manufacturing | 1.78 | -0.07 | 5.66 | 40.09 |
| 1,912 | Adaro Energy | Energy | 2.08 | 1.38 | 10.91 | 3.38 |
| 1,923 | DCI Indonesia | Business Services/Data Center | 0.14 | 0.07 | 0.32 | 23.65 |
| 1,986 | Adaro Andalan | Materials | 5.32 | 1.21 | 5.99 | 3.17 |
| 1,998 | Lippo Karawaci | Construction | 0.76 | 1.18 | 3.34 | 0.37 |
Public expenditure
See also: Taxation in Indonesia
In 2015, Indonesia spent about Rp 1,806 trillion (US$130.88 billion), which was 15.7% of the country’s total economy. The government collected Rp 1,508 trillion (US$109.28 billion) from taxes and other sources, leaving a small shortfall of 2.6%. After facing financial challenges in 1997, Indonesia improved its money management. By 2006, about 40% of public money went to local governments.
When oil prices rose in 2005, the government cut some fuel costs, giving it more money for development. By 2006, steady growth helped the government save even more. In 2018, President Joko Widodo took out more foreign loans to build important projects like roads, bridges, and airports. Finance Minister Sri Mulyani said that even with more loans, the government also spent more on infrastructure, healthcare, education, and local areas. The government believes the debt is managed carefully and stays within legal limits.
Regional performance
In 2009, some places in Indonesia did very well in how they managed their areas. The top three were North Sulawesi, South Sulawesi, and Central Java. Ten smaller areas also did great, such as Jombang, Bojonegoro, and Pacitan in East Java.
Ten cities stood out too, including Surakarta and Semarang in Central Java, as well as Yogyakarta city in Yogyakarta. Japanese companies said they were very happy with their sales and profits in Indonesia that year.
Wealth
See also: List of Indonesians by net worth
National net wealth
National net wealth is the total value of everything a country owns, like buildings and land, minus what it owes. It shows how much money a country can use for important things. Indonesia’s national net wealth is about $3.199 trillion, which is a big part of the world’s wealth. This puts Indonesia among the top countries for wealth.
High-net-worth individuals
Indonesia is expected to have a fast-growing number of very wealthy people. In 2014, there were 24 people in Indonesia with more than $1 billion each. Most of them lived in Jakarta, the capital city. There were also many others with large amounts of money to spend.
Challenges
Corruption is a big problem in Indonesia’s government. It affects many areas, making it hard for the country to grow. In 2019, a law that weakened the group trying to fight corruption was passed, even though many people protested against it.
Workers in Indonesia have also faced issues. In 2015, thousands of workers demonstrated for higher wages and better laws. In 2020, more protests happened against new rules that made it easier for companies to fire workers and paid less for leaving jobs.
There are big differences in wealth across the country. Some areas, like Jakarta, have much more money than poorer regions such as Aceh and Papua. This uneven sharing of wealth has caused some people to feel unhappy.
Inflation, or rising prices, has been a long-term problem. In 1998, prices rose very quickly during a crisis, making life harder for many people. Today, the government works to keep prices stable, but inflation still affects many families, especially those with less money.
The country’s ability to produce goods and services has grown slowly, which limits economic growth. Manufacturing, making things by hand or in factories, has become a smaller part of the economy. This slow growth in making things has helped keep Indonesia’s overall growth lower than other countries in the area.
Not enough money has been put into building and improving the country. Both public and private spending on things like schools and factories stays lower than in other nearby nations. This also helps explain why growth has been slower than expected.
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