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Finally. Indonesia Economy Hits Trillion-dollar Milestone
ECONOMY Indonesia

Finally. Indonesia Economy Hits Trillion-dollar Milestone

Indonesia’s economy, the largest in Southeast Asia, hit a milestone in 2017 by reaching US$1 trillion. 

Gross domestic product (GDP) was an estimated US$1.004 trillion in 2017, eventhough economic growth was probably lower than the 5.2% initially projected.

The liberalisation of foreign investment regulations boosted FDI inflows. By tackling bottlenecks in transportation, agriculture and fisheries, and energy diversification, Indonesia could unlock a further $1.8 trillion in business opportunities by 2030. To achieve its full potential, MicKinsey advises labour productivity will need to grow at an annual rate of 4.6% (a 60% increase over the average growth rate this past decade).

Indonesia young population | unsplash.com by Deddy Yoga Pratama
Indonesia young population | unsplash.com by Deddy Yoga Pratama

The Indonesian economy is the largest economy in Southeast Asia and is one of the world’s largest emerging markets. Indonesian GDP is projected to exceed $3.7 trillion in 2030. “This will significantly increase Indonesia’s global geopolitical influence as a leading emerging market, shaping international policymaking in global forums such as the G-20 and United Nations,” according to IHS. 

Indonesia has a large and fast-growing population (250 million), fast-growing household spending by middle class households and rapid growth projected in a wide range of industries. Currently the world´s 16th largest economy, McKinsey estimates Indonesia could leap into 7th place (overtaking Germany and the UK) if it can increase productivity. A rapidly growing population, set to add 90 million more people over the next two decades, is spurring domestic consumption.

Jakarta | freeimages.com
Jakarta | freeimages.com

Four Southeast Asian economies will soon pass the trillion-dollar GDP mark by 2030. Following Indonesia, three  members of ASEAN were projected to achieve this prestigious milestone: Malaysia, Thailand, and the Philippines. 

(For various sources)

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