Economic Trends/Outlook in Indonesia

Overview by Globlatrade.net:

Economic Overview

Due to the unfavorable international economic situation, the Indonesian growth rate has evidently slowed down in 2009 (4.5%).  However, it has shown more resistance than its neighboring countries due to the low amount of exports on its economy and the importance of private consumption since the country has a significant domestic market.  The country adopted a stimulus plan which lowered taxes, increased subsidies and commitments for supplemental expenditures, which have allowed to soften the effects of the crisis.  The growth, estimated at 6% of the GDP, has accelerated in 2010, under the effects of the revival of investments and the continuous growth of private consumption.

 

Despite the good results from the main economic indicators, structural reforms are required.  A large program of development of infrastructures has been issued.  The country suffers from sub-investment, the authorities are strongly promoting public-private partnerships.  The government has also re-confirmed its priority to the fight against corruption.  In addition, the protection of the environment is a major challenge in Indonesia.

The unemployment level remains high and many workers are in a precarious condition.  A large part of the population lives below the poverty line and the gap between the very rich and the very poor does not diminish.

 
Main Indicators 2009 2010 2011 2012 2013
GDP (billions USD) 538.46 706.74e 822.63e 908.13e 997.94e
GDP (Constant Prices, Annual % Change) 4.6 6.1e 6.2e 6.5e 6.7e
GDP per Capita (USD) 2,327e 3,015e 3,465e 3,776e 4,096e
General Government Balance (in % of GDP) -1.7 -0.5e -1.5e -1.4e -1.3e
General Government Gross Debt (in % of GDP) 28.6 26.9e 25.4e 24.0e 22.8e
Inflation Rate (%) 4.8 5.1e 7.1e 5.9e 5.3e
Unemployment Rate (% of the Labor Force) 7.9 7.1e 6.7e 6.5e 6.4e
Current Account (billions USD) 10.58e 9.48e 2.84e -2.27e -
Current Account (in % of GDP) 2.0e 1.4e 0.4e -0.3e -

Source: IMF - World Economic Outlook Database

Note: (e) Estimated Data

 

Main Sectors of Industry

The agricultural sector contributes to nearly 14% of the country‚Äôs GDP and employs nearly 40% of the active population. Indonesia is one of the largest rubber producers in the world. Other major crops are rice, sugar cane, coffee, tea, tobacco, palm oil, coconuts and spices. Indonesia is the only Asian country to be an member of the OPEC to which it assures 5% of its production. However, it is still a net importer of oil. The country has great exploitable timber lands and mainly exports timber. 

 

 

Industries contribute to around half of the GDP. The industrial sector includes manufacturing of textiles, cement, chemical fertilizers, electronic products, rubber tires, clothing and shoes (most of these are for the American market). Wood processing is also a major activity.

The tertiary sector (financial institutions, transportation and communications) contributes to around 40% of the GDP. The banking sector is well-developed. The Islamic bank  Syariah  has expanded rapidly during these recent years. Tourism is a major source of revenue, however, the sector has suffered from terrorist threats and natural catastrophes.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 41.2 18.8 39.9
Value Added (in % of GDP) 15.8 49.1 35.2
Value Added (Annual % Change) 4.1 3.5 2.1

Source: World Bank - Last Available Data.

 
 
 
For more detailed background on Industries in Indonesia, click here.
 

Indicator of Economic Freedom

Score:
56.0/100
Position:
Mostly unfree
World Rank:
112/179
Regional Rank:
21/38

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

 

Country Risk

See the Country Risk Analysis Provided By Ducroire.

 

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