INDONESIA’S ECONOMIC GROWTH

There has been a change in the economic structure of most Southeast Asian countries, including Indonesia with the manufacturing sector gradually taking over from agriculture. In the first quarter of 2023, the contribution of agriculture to Indonesia’s gross domestic product was around 12.5%, while manufacturing contributed approximately 23.5%.

Nonetheless, the performance of the industrial sector has been largely attributable to the food and beverage industry, representing 33.7%, while the contribution of the mining and metal industries has been relatively low, comprised of coal, oil, and gas (9.1%), metal products (8.6%), and base metals (5.3%).

KEY GOVERNMENT POLICIES CREATING NEW INVESTMENT OPPORTUNITIES

Investment commitment continues to increase from year to year, reflecting the long-term optimism investors have towards Indonesia. The government has initiated several investment-boosting policies, such as (1) Indonesia 2045: Indonesia aims to become the fifth largest economy in the world with a GDP of US$7.3 trillion and a per capital income of US$25,000 by 2045; (2) National Strategic Projects: Government is promoting several national strategic projects for accelerated development, including transportation and utility infrastructure, housing and tourism. (3) Omnibus Law: this aims to increase Indonesia’s competitiveness, create jobs, and make it easier to do business in the country; (4)Making Indonesia 4.0: A policy aimed at supporting the local manufacturing sector.