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Economic Overview



Indonesia’s economy continues to expand favourably despite regional and global challenges with 5.02% GDP growth and GDP per capita (current price) is USD 3.531.5 in 2014. Since its membership in G-20 in 2009, Indonesia gained an excellent economic performance and became one of the emerging market economies of the world. The government plays a significant role through ownership of state-owned enterprises. In the aftermath of the financial and economic crisis that began in mid-1997, the government took custody of a significant portion of private sector assets through acquisition of nonperforming bank loans and corporate assets through the debt restructuring process. This strategy also helped the country withstood the very recent world economic crisis.


Its annual GDP has grown by an average of 5.7% over the past decades. The country’s consumption-driven economy will provide a shield against uncertain external demand. About 48% of Indonesia’s GDP in 2014 is generated from domestic consumption. Indonesia’s middle class is about 74 million out from the total population of 250 million. Boston Consulting Group (BCG) reported that the number of middle class is expected to double by 141 million in the next seven (7) years.


Aside from being one of the emerging market economies of the world, Indonesia is also one of the most promising investment destinations. Around 65% of the 250 million population compose of human resource with unit labor cost comparatively lower than that of Peoples Republic of China and Vietnam. In 2014, Investment achieved a total of Rp. 463.1 trillion. Foreign Direct Investment totalled to Rp. 307 trillion, on the other hand Domestic Investment totalled to Rp. 156.1 trillion. Singapore, Japan, South Korea and the United States of America remained as the largest investors.


Under the leadership of the newly-elected President, Joko Widodo, Indonesia aspires to maximize its potentials as archipelagic country. This will include maximizing its fisheries industry and taking full advantage of Indonesia’s strategic location between economicly-bustling sea lanes. At the same time, inclusive economy will be one of the main focus. Promoting the economic contribution and development of Small and Medium Enterprises (SMEs) as well as creating a condusive environment for the development of creative economy.


Essential to this aspiration is the infrastructure development. The President Joko Widodo’s administration put forward strategic planning to improve Indonesia’s infrastructure by:


1.       Establishing New Indonesian Special Economic Zones

2.       Highway Development Project Plan

3.       Railway Development Project Plan

4.       Seaport Development Project Plan

5.       Airport Development Project Plan

6.       Increasing the number of Power Plant