As the largest economy in Southeast Asia, Indonesia continues to demonstrate dynamic development. Since the 1997 Asian financial crisis, few could have predicted the impressive growth the country would achieve.
According to the World Bank, Indonesia’s economy performed strongly in 2023, driven by domestic consumption, natural resource exports, and infrastructure investment. The country’s GDP grew by 5% in 2023. However, projections for 2024 indicate a slight slowdown to around 4.7% due to declining commodity prices. From 2025 to 2026, growth is expected to stabilize at 4.9%, assuming no major global economic downturns impact Indonesia’s trajectory.
The Indonesian government is actively working to reduce its dependency on raw material exports by diversifying the economy and supporting emerging sectors such as:
• Agriculture
• Mining
• Tourism
• Manufacturing
• Digital economy
These and other sectors are contributing to a steady strengthening of the country’s economy.
While the economy remains strong, the country is still recovering from the pandemic of 2021. Nevertheless, according to the World Bank, inflation is declining, and the currency remains stable. The Indonesian government is continuing to stimulate the economy through a long-term strategic plan. Over the next 20 years, this plan includes infrastructure improvements, tax reforms, and increasing foreign investment. Experts predict continued economic growth, which offers significant opportunities for foreign investors and entrepreneurs. Doing business in Indonesia presents unique and promising development prospects.
1. GDP (Gross Domestic Product): Indonesia is among the top 20 largest economies in the world by nominal GDP.
2. Ease of doing business: According to the World Bank, Indonesia has been consistently improving its business environment. In 2014, the country ranked 120th globally; by 2024, it had climbed to 73rd.
3. Tourism: Bali has become one of the most popular tourist destinations in the world. For foreign investors, it is an ideal location to launch or expand a business.
4. Geography: Indonesia is the world’s largest archipelago, consisting of more than 17,000 islands.
5. Mining and natural resources: Indonesia is rich in natural resources. It ranks 8th globally in natural gas production and 1st in nickel production.
6. Other industries: Indonesia ranks 4th globally in coffee production and export, 3rd in rice, and 2nd in rubber.
7. Population: Indonesia is the fourth most populous country in the world after China, India, and the United States.
Indonesia’s population exceeds 270 million. According to the Central Bureau of Statistics, this number is expected to grow to 305 million by 2035, with an annual increase of approximately 3 million.
Various sources estimate that 20–30% of the population belongs to the middle class. This group has significantly expanded in recent years due to improving economic conditions, infrastructure development, and access to education. Urban income growth has also enhanced the population’s purchasing power. In 2024, the average monthly salary in Indonesia is approximately 9 million IDR (around 570 USD).
The most economically active population is typically concentrated in major cities where more job opportunities and higher salaries are available.
Top 5 cities by income and business activity:
1. Jakarta – the capital and largest economic hub of the country, home to major national and international corporations.
2. Surabaya – the second-largest city and a key commercial center on the island of Java.
3. Bandung – a center of education and technology with a developed industrial base.
4. Medan – a large city on the island of Sumatra, known as a major trade hub.
5. Denpasar (Bali) – a tourism-driven economy provides high income levels due to a steady flow of visitors.
However, poverty levels remain high in rural areas. The Indonesian government is working to address this by supporting underprivileged communities through social programs, small business development, and investments in infrastructure to create jobs.
These initiatives have shown results. According to the World Bank and other international organizations, poverty in Indonesia has significantly decreased. Over the past few decades, approximately 10–15% of the population has been lifted out of poverty.
To summarize, Indonesia’s economic growth and expanding middle class present a positive outlook. Continued reforms in sectors ranging from industry to education will further drive progress. Foreign investment also plays a major role in economic development, with international entrepreneurs creating jobs by establishing businesses in the country. Starting a business in Indonesia is relatively straightforward, and foreign investors benefit from special registration conditions. Want to learn more? Contact our team — we’ll guide you through every step of launching your business in Indonesia.
