With more than 33% of the ASEAN GDP, Indonesia is a key emerging market in Southeast Asia with remarkable growth rates and a burgeoning middle class. The archipelago is the 4th most populous and the 10th largest economy in the world on a Purchasing Power Parity (PPP) basis, with an important say in international economic fora such as the WTO and G20. The Indonesian economy has more than tripled its size in the last decade, and GDP growth in 2017 was 5.2%. Throughout 2017, Indonesia’s economy has regained a recovery momentum and macroeconomic stability has been maintained. Foreign direct investment into Indonesia grew steadily by 8.4% in 2017.
With Indonesia’s burgeouing middle class potential, and household consumption accounting for 55% of GDP, increased incomes provide a massive opportunity for businesses. Over 40% of the population lie below the age of 30, are digital natives and are giving rise to the ”demographic dividend”.
Starting from 2015, Indonesia released a number of policy reform packages and legislative changes intended to stimulate the Indonesian economy. The reforms initiated by President Joko Widodo focus on improving industrial competitiveness through reducing red tape and other practical measures aimed at improving ease of doing business in Indonesia. In the World Bank’s Ease of Doing Business 2018 edition, Indonesia ranks 72nd, jumping 19 positions from being 91st in last year’s ranking (#114 in 2014). The World Bank praised Indonesia and labelled it as the country that made the biggest improvements in business regulations among Asia Pacific nations since 2005.
Indonesia has the world’s fourth largest middle class and ranks 3rd place in the top 5 emerging markets with the best middles class potential. Between 135 and 170 million people will be join the consuming class by 2030, depending on the GDP growth rates. Indonesia is forecasted t0 become the 5th largest economy in the world by 2030.