23 Sep Compelling macro, demographics and outlook
Indonesia is ASEAN’s economic powerhouse and enjoys strong and alluring macro-economic fundamentals which include:
1) Being part of the elite group of countries that belong to the US$ 1 trillion GDP club;
2) Demographic advantage including largest population in ASEAN and young workforce; increasing consumer savings and spending;
3) One of the lowest public debt/GDP ratio in Asia;
4) Affirmation by market rating agencies as investment grade in 2021;
5) 7th largest economy in the world (up from 16th largest currently) by 2030;
6) $1.8 trillion market opportunity in consumer services, agriculture & fisheries resources and education (up from $ 0.5 trillion now).
The country’s future potential is bright and goals for 2030 include:
1) Introduction of Omnibus Law
2) Smart cities to spur growth outside Java and an ambitious plan to shift the capital commencing in 2024;
3) Focus on downstream-integrated, value-added manufacturing capabilities – abundance of nickel ore to become global supply chain player in lithium battery and its recycling process.
(Source: Mckinsey Global Institute; The Archipelago Economy: Unleashing Indonesia’s Potential)
Indonesia’s large workforce makes the country an ideal hub for industrial production. The country’s large cities are transforming into specialized industrial and service hubs to help the modernization of its economy, notably through the industries of machinery, electronics, automotive and auto-parts.
The culture of hospitality towards foreigners makes it easy for expats to blend in despite English not being the main language.
On gender parameters Indonesia scores well with a 53% average for female labour force participation; the country is perceived as safe for women at workplace and in social spaces.