Although the Asian Financial Crisis had disastrous consequences (especially on the poorer urban segments of society), important lessons have been learned too. The financial system for example, which to a large extent lacked supervision and transparency, was replaced by a system entailing more prudent fiscal policies in line with international economic standards, thus fostering integration with global markets. Moreover, the Asian Financial Crisis has been the catalyst for a process of political democratization and liberalization that continues up to the present.
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.
Sources: World Bank, IMF, Statistics Indonesia and CIA World FactbookComposition 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 | 51 | 24 | 16 | 15 |
(percent of GDP) | ||||
Industry | 13 | 42 | 43 | 47 |
(percent of GDP) | ||||
Services | 36 | 34 | 41 | 37 |
(percent of GDP) |
Indonesia's Economic Fact Sheet |
• Indonesia was an USD $850 billion economy in 2012 |
• In 2012 private consumption accounted for about 55 percent of economic activity in Indonesia, partly due to low borrowing costs and rising GDP per capita |
• Per Capita GDP rose from USD $780 in 2000 to USD $3,540 in 2011 |
• Exports account for around 20 percent of GDP. China, Japan, USA and India are Indonesia's largest export destinations |
• Around half of Indonesia's exports consist of commodities (in particular palm oil, coal and rubber) |
• In 2012 Foreign Direct Investment (FDI) in Indonesia jumped around 26 percent (to USD $29.5 billion) compared to 2011 |
• Mining accounted for around 12 percent of gross domestic product in 2011 |
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