The economy of Indonesia is the largest in Southeast Asia and is one of the emerging market economies of the world. It is the 15th largest economy in the world by nominal GDP and the 7th largest in terms of GDP (PPP). As an upper-middle income country and member of the G20, Indonesia is classified as a newly industrialized country. Indonesia is predicted to be 4th largest economy in the world by 2045.
The following tables and chart will tell the change details in last 5-10 years:
Indonesia Distribution of workforce from the last 5 years:
Indonesia Distribution of GDP across economic sectors:
Here attached the last 10 years chart of Indonesia GDP: (amount in billion USD):
3 Sectors of the Economy – Agriculture, Industry and Services:
Agriculture is an important part in the Indonesia’s economy. It employs almost 28% of the total workforce and contributed almost 12.72% in GDP.
Indonesia’s top agri-food and seafood exports were valued at $43.0 billion in 2019. Indonesia’s major agricultural exports consist of products of tree crops, including palm and coconut products (33.8 percent), rubber (18.6 percent), coffee, tea and spices (25.9 percent). Indonesia has also had some success at diversifying into higher valued fruits and vegetables (5.8 percent).
Major Product in this Sector:
Palm Oil: Indonesia is both the world’s biggest producer and consumer of the commodity, providing about half the world supply. In 2020, the value of Indonesia’s total palm oil exports amounted to around 18.45 billion U.S dollars. Palm Oil is the essential ingredients to produces cooking oil, as well as other food and cosmetics products. The country also aimed to be the largest palm-based biofuel production center.
Rubber: Indonesia’s rubber production is the world’s second-largest after Thailand. Natural rubber is an important export commodity that earn foreign exchange, with increasing production trend. Majority of rubber estates in Indonesia are smallholder farmers, which retain for about 85 percent. Another problem is the lack of rubber processing facilities and manufacturing industry. In Indonesia, only a half of the natural rubber that is absorbed internally goes to the rubber products factories — while the rest are sold and exported as raw materials.
Agriculture Subsidy in Indonesia:
Producer support to agriculture increased significantly in the 2000s from 7% of gross farm receipts to 24%, but has remained stable around that level over the past decade. Expenditures on general services for the sector (GSSE) are small compared to producer support, representing 5.5% of the Total Support Estimate (TSE). Total support amounts to around 3.2% of GDP.
During 2015-20, Indonesia maintained the main features of its agricultural policy settings that were adopted in 2012. Market price support delivered through domestic and trade policy settings, along with budgetary transfers for variable inputs (mainly in the form of subsidies to fertilizer, seeds, credit, and grants for equipment) have been the main form of support provided to producers. The government minimum purchase prices for sugar, soybeans and paddy rice have remained constant in nominal terms since 2015.
Industry is an important part in the Indonesia’s economy. It accounts for 39% of GDP and employed almost 23% of the workforce.
Major Industries in this Sector:
Mining: As of 2019, the export revenue of the mining industry in Indonesia amounted to about 24 billion US Dollars. Mining products accounted for 13.1% of total merchandise exports in 2019 and coal made up over 90% of this trade. Indonesia has abundant mineral resources, including tin, gold, natural gas, coal, nickel, and copper. Silver, bauxite, and petroleum are also available in smaller quantities. Indonesia is the leading producer of copper, nickel and gold. Indonesia’s Grasberg mine is the third-largest copper mine in the world and the largest gold mine in terms of output and size.
Motor Cycle Industry: In 2019, Indonesia sold 7.6 million motorcycles, which were mainly produced in the country with almost 100% local components. Honda led the market with a 50.95% market share, followed by Yamaha with 41.37%. The Indonesian motorcycles industry is the third in the World since almost twenty years representing the primary private transporting sector for people and goods and having a size 6 time bigger than the automotive industry.
Industry is an important part in the Indonesia’s economy. It accounts for 44.23% of GDP and employed almost 49.62% of the workforce.
Major Industries in this Sector:
Finance: This sector contributes 4.2% in GDP. If we comparison with other countries then financial sector in Indonesia is not that much developed. As of March 2019, Indonesia had 115 commercial banks and 1,630 rural banks. The largest four banks hold over 45 percent of bank assets. As ranked by assets, the following are the four largest state-owned banks: Bank Mandiri, Bank Rakyat Indonesia, Bank Negara Indonesia, and BTPN. The Financial Services Authority regulates key aspects of the banking and financial system, including bank regulation and supervision, whereas Bank Indonesia (BI), the Central Bank of Indonesia, an independent state institution, regulates payment systems and conducts foreign exchange supervision.
Tourism: In 2019, Indonesia recorded 16.10 million foreign tourist arrivals, seeing a 1.9% per cent increase than that of 2018. In 2019, contribution of tourism to GDP amounted to IDR 536.8 trillion, 4.1% of Indonesia’s total GDP. In the same year, tourism provided 12.7 million jobs, representing 10.5% of total employment. Tourism receipts totaled IDR 200 billion and the sector out-performed the general growth of the Indonesian economy.
Top Companies in Indonesia by market capitalization
|Company Name||Sector||Market Cap (USD)|
|Bank Central Asia||Banking||$53.20B|
|Bank Rakyat Indonesia||Banking||$34.44B|
|Unilever Indonesia||Consumer Goods||$15.10B|
|Chandra Asri Petrochemical||Oil and Gas||$9.36B|
|Elang Mahkota Teknologi||Technology||$8.75B|