Indonesia is Southeast Asia’s largest economy and one of the most dynamic emerging markets in the world. 

With a population of more than 270 million people, the country benefits from a vast domestic consumer base, abundant natural resources, and strategic geographic positioning along major global trade routes. 

Its economy has shown resilience in the face of global challenges, maintaining steady growth and building momentum as a regional hub for investment and industry.

Gross domestic product (GDP) growth remains underpinned by a mix of consumption, investment, and exports. 

A growing middle class continues to drive demand for goods and services, while government spending on infrastructure supports long-term productivity. 

At the same time, foreign direct investment (FDI) flows have strengthened, with reforms improving the business climate and attracting capital into manufacturing, energy, and technology.

Indonesia’s key industries highlight its dual strengths in traditional and modern sectors. Natural resources such as coal, palm oil, and nickel remain central to exports, but new growth engines are emerging in manufacturing, digital services, and renewable energy. 

This balance positions Indonesia as both a resource powerhouse and a rising industrial economy, offering diverse opportunities for investors.

Key Indonesia economic data

Indonesia’s economy is shaped by a mix of industry, services, and agriculture. 

The country has developed a broad production base while also expanding its role in trade and modern services. 

This balance highlights its position as a dynamic and diverse economy in Southeast Asia.

Indonesia’s GDP in 2024 by sector

Latest Indonesia GDP growth forecasts

These are some of the most recent projections for Indonesia’s GDP growth in 2025.

July 2025: Indonesia’s GDP growth for 2025 was forecast at 5.1 percent, unchanged from the earlier projection, with 2026 growth also maintained at 4.7 percent, according to the ASEAN+3 Regional Economic Outlook Update, July 2025.

June 2025: Indonesia’s real GDP was projected to grow by 4.7 percent in 2025 and 4.8 percent in 2026, according to the OECD Economic Outlook 2025.

April 2025 (World Bank): The World Bank downgraded Indonesia’s economic growth forecast for 2025 to 4.7 percent, down from the 5.1 percent projected in October 2024, according to its April 2025 East Asia and the Pacific Economic Update.

April 2025 (IMF): The IMF projected Indonesia’s economic growth to slow to 4.7 percent in 2025, down from the 5.1 percent forecast made six months earlier, and expected the 4.7 percent rate to hold steady in 2026, according to its April 2025 World Economic Outlook.

Foreign direct investment in Indonesia

Foreign direct investment in Indonesia is driven by the country’s large domestic market, abundant natural resources, and strategic location in Southeast Asia.

Capital has consistently flowed into sectors such as mining, metals processing, manufacturing, and infrastructure, with strong interest also in digital services and consumer industries. 

Singapore, China, and Japan remain leading sources of investment, often using Indonesia as a production base to serve regional and global markets. 

Indonesia FDI by sector 2023

Source: BPI – Statistics Indonesia

Indonesia’s key industries

Indonesia’s economy is powered by a diverse set of industries that balance its natural resource wealth with rapid modernisation. 

From mining and agriculture to manufacturing, finance, and a booming digital sector, these industries form the backbone of growth and make the country a key investment destination in Southeast Asia.

Mining and natural resources

Indonesia is a leading global producer of coal, nickel, tin, copper, and gold. Nickel, in particular, has attracted significant foreign investment because of its role in electric vehicle batteries. 

The government promotes downstream processing to move beyond raw exports and develop value-added industries.

Manufacturing

Manufacturing contributes strongly to GDP, spanning automotive, electronics, textiles, and food processing. 

Policy efforts aim to make Indonesia a regional hub for industrial production, supported by special economic zones and incentives for high-tech industries.

Agriculture and fisheries

Agriculture remains a major employer, with palm oil, rubber, coffee, cocoa, and fisheries products dominating exports. 

Productivity improvements and sustainability concerns continue to shape the sector’s development.

Infrastructure and construction

Infrastructure investment is central to Indonesia’s growth agenda. 

Large projects in transport, energy, and urban development aim to improve connectivity across the archipelago and support industrial growth.

Energy

Indonesia has vast coal, oil, and gas reserves but is also investing heavily in renewables such as geothermal, hydropower, and solar. 

The energy transition is becoming a key focus as global demand shifts toward cleaner sources.

Financial services

Banking, insurance, and fintech are expanding rapidly, driven by a large unbanked population and growing digital adoption. 

Indonesia’s financial services industry is critical for mobilising capital and supporting domestic consumption.

Digital economy

E-commerce, ride-hailing, digital payments, and online services are booming. 

Indonesia has produced several tech unicorns, reflecting strong consumer demand and investor confidence in its digital transformation.

Trade

Indonesia’s imports in 2024 totalled US$235.2 billion, up 5.4 percent from the previous year, according to data from BPS – Statistics Indonesia. 

Oil and gas accounted for US$36.3 billion, while non-oil and gas made up US$198.9 billion. 

China was the largest supplier with US$73.9 billion, followed by Singapore at US$21.5 billion and Japan at US$15.0 billion. 

By category, imports were dominated by raw and auxiliary materials at US$170.7 billion (72.6 percent), with capital goods at US$41.8 billion and consumer goods at US$22.7 billion.

Overall, Indonesia’s trade structure reflects its dual role as a global supplier of raw materials and an importer of capital goods, technology, and food products. 

This balance underscores both the opportunities and vulnerabilities of an economy that is resource-rich but reliant on external partners for industrial inputs and consumer needs.

Exports

Indonesia’s exports are centred on natural resources and related industries. 

Mineral fuels, especially coal, remain the single largest category, supplying key markets in Asia such as China and India. 

Palm oil is another dominant export, making Indonesia the world’s largest producer and exporter of this commodity, with buyers spanning from South Asia to Europe. 

Metals and minerals, including nickel, copper, tin, and bauxite, are increasingly important, particularly as global demand for electric vehicle batteries and renewable energy inputs rises. 

Processed metals such as iron and steel, along with manufactured products like footwear, textiles, vehicles, and electronics, also contribute significantly to the export base, highlighting the gradual diversification of Indonesia’s economy beyond raw commodities.

Imports

Indonesia’s imports focus heavily on inputs needed to sustain industrialisation and domestic consumption.

Petroleum products and mineral fuels make up a large share, reflecting both rising energy demand and the need to support its transport and manufacturing sectors. 

Machinery, industrial equipment, and electrical goods are critical imports, underpinning industrial expansion and infrastructure development. 

Foodstuffs are another major category, as Indonesia supplements domestic production with imports of wheat, sugar, and other staples. 

Chemicals, plastics, and raw materials also form a substantial part of the import mix, feeding into the country’s growing manufacturing base.

Regional comparison

Indonesia is Southeast Asia’s largest economy, driven by natural resources, manufacturing, and a fast-growing digital sector that is a little different from its regional peers.

This is a short overview of other regional economies.

Vietnam

An export-driven economy anchored in manufacturing, electronics, and textiles. 

High FDI inflows and integration into global supply chains underpin rapid growth, though dependence on external markets and infrastructure strain pose risks.

Thailand

A more mature, middle-income economy reliant on automotive, electronics, and tourism. 

Growth is steadier but constrained by ageing demographics and slower structural reforms.

Malaysia

Diversified economy with strengths in electronics, palm oil, and oil and gas. 

Higher income levels than most regional peers, with stable institutions but facing competition in attracting FDI.

Philippines

Service-oriented economy led by remittances, business process outsourcing, and a young consumer base. 

Strong domestic demand offsets weak infrastructure and governance bottlenecks.

Laos

Resource-dependent, with growth tied to hydropower, mining, and cross-border infrastructure. 

High debt levels and reliance on Chinese investment limit resilience.

Cambodia

Garments, tourism, and agriculture dominate exports, supported by preferential trade access. 

Growth remains strong but vulnerable to external shocks and governance weaknesses.

FAQ: Economy of Indonesia

These are some of the most common questions about Indonesia’s economy.

What was Indonesia’s GDP growth in 2024?

Indonesia’s GDP growth in 2024 was about 5 percent.

Which sectors primarily contributed to Indonesia’s GDP in 2024?

The sectors that primarily contributed to Indonesia’s GDP in 2024 were services, manufacturing, mining, and agriculture.

What are some of Indonesia’s key industries as of 2024?

Some of Indonesia’s key industries as of 2024 were mining, manufacturing, agriculture, energy, finance, and the digital economy.

What was the value of Indonesia’s exports and imports in 2024?

The value of Indonesia’s exports and imports in 2024 was about US$258 billion and US$210 billion respectively.

Outlook for Indonesia’s economy

Indonesia’s economy continues to expand on the back of strong domestic demand, foreign investment, and a growing industrial base. 

The average wage levels are rising steadily, reflecting productivity gains and the shift toward higher-value industries, though disparities remain across regions and sectors. 

At the same time, business setup procedures are being simplified, with reforms in ownership rules, registration, and compliance aimed at attracting foreign investors and supporting the growth of small and medium enterprises. 

Together, these dynamics point to an economy balancing competitiveness with the push for broader prosperity.

That said, the business environment in Indonesia is dynamic and can change quickly. To keep up to date with the latest developments make sure to subscribe to Vieter.