Gross Domestic Product growth and forecast

Indonesia’s Gross Domestic Product (GDP) was valued at IDR 160911trillion (US$ 1058.42 billion) in 2020, as per official data from the World Bank. Indonesia’s GDP represented 0.94 percent of the world economy.

In 2021, the gross domestic product of Southeast Asia's largest economy climbed 3.69 percent from a year earlier, rebounding from a 2.07 percent contraction in 2020. The country’s finance ministry had previously forecast growth at 3.7 percent. Annual household consumption, which makes up over half of Indonesia's GDP, grew 2.02 percent YoY, recovering from a 2.63 percent fall in 2020.

Although there was an increase in GDP, it is still falling short of the five percent pre-pandemic growth trend. In the long-term, the Indonesia GDP is projected to trend around IDR 18480 trillion (US$ 1270 billion) in 2022.

The International Monetary Fund lowered its estimate of Indonesia's 2022 GDP growth rate to 5.6 percent, from the previously forecasted 5.9 percent in its World Economic Outlook update in January 2022. The IMF has also reduced Indonesia's 2023 growth forecast to six percent from 6.4 percent. The reason for the reduction in GDP forecasts is attributed to the uncertainty surround the pandemic, predicted global monetary tightening, and the country's reduction of monetary and fiscal support.

Foreign Direct Investment trends

Foreign direct investment into Indonesia (excluding investment in banking and the oil and gas sectors) grew 31.8 percent YoY to a record high of IDR 149114.91 billion (US$ 10.22 billion) in Q1 2022, accelerating from a 10.1 percent growth in the previous period. The boost in FDI was attributed to the Indonesian government making efforts to ease business and licensing rules and improvements to the COVID-19 situation in the country.

Singapore was the biggest source of investment IDR 52383.60 billion (US$ 3.6 billion), followed by Hong Kong (US$ 1.5 billion), China (US$ 1.4 billion), Japan (US$ 0.8 billion), and the US (US$ 0.6 billion), while base metals and transportation, warehousing and telecommunications and utilities were among the sectors receiving most of the investment. Indonesia posted a record peak in foreign and domestic investment of IDR 282.4 trillion during Q1 2022, up 28.5 percent.

According to the Indonesian Investment Authority BKPM, Indonesia attracted IDR 453764.55 billion (US$31.1 billion) in foreign investment in 2021, a 10 percent increase over 2020. An uptick of IDR 35017.20 billion (US$ 2.4 billion) compared to the previous year and just shy of the record year 2017 where FDI touched IDR 468355.05 billion (US$ 32.1 billion). Over the course of the year, FDI totaled IDR 454 trillion (US$, a 10 percent increase over 2020.

[tips title="Did You Know"]Foreign direct investment into Indonesia increased by 10.1 percent YoY in Q4 2021, reaching a new record high of IDR 124019.25 billion (US$ 8.50 billion), recovering considerably from a 2.7 percent decline in the previous period – excluding investment in the banking, as well as oil and gas sectors.[/tips]

As the COVID-19 situation in the country improved, the Indonesian government provided substantial assistance to the economy by improving the ease of doing business and simplifying licensing procedures. Singapore made the largest investments, followed by Hong Kong, China, the United States, Japan, and the Netherlands.

Indonesia’s export statistics

Indonesia is rich in natural resources - including crude oil, natural gas, tin, copper, and gold. This also constitutes the bulk of Indonesian exports. Machinery and equipment, chemicals, fuels, and foodstuffs are among the most valuable imported goods.

Exports in Indonesia increased to IDR 397533.32 billion (US$27.32 billion) in April from IDR 385601.50 billion (US$26.50 billion) in March of 2022. In the long-term, the Indonesia Exports is projected to trend around IDR 232816.00 billion (US$16 billion) in 2023 and IDR 257552.70 billion (US$17.7 billion) in 2024, according to Trading Economics econometric models.

Exports from Indonesia jumped 47.76 percent to IDR 397533.32 billion (US$ 27.32 billion) in April of 2022 from a year earlier to hit a new record high, clearly surpassing market forecasts of a 35.97 percent rise and the revised 44.37 percent growth in the month prior. It was the 14th consecutive month of double-digit growth, with the sharpest pace in five months, amid surging commodity prices.

Non-oil and gas exports increased by 47.70 percent to IDR 376725.39 billion (US$ 25.89 billion); while oil and gas exports surging by 48.92 percent to IDR 20807.93 billion (US$ 1.43 billion). For the first four months of 2022, exports soared 38.68 percent YoY to IDR 1360081.97 billion (US$ 93.47 billion).

In 2021, Indonesian goods exports were valued at IDR 1497297.90 billion (US$102.9 billion) from January to June, an increase of approximately 34.8 percent. Meanwhile, export growth was 35.30 percent YoY - compared with the expectation of 40.40 percent growth. Exports were impeded due to reduced shipments of coal to China, as Beijing increased domestic coal production.

Indonesia’s import statistics

Imports in Indonesia increased to IDR 319384.80 billion (US$21.967 billion) in March 2022, from IDR 241912.14 billion (US$16.6385 billion) in February. Long term forecasts for Indonesian imports are expected to trend at IDR 203550.20 million (US$14 billion) in 2023.

Imports to Indonesia grew 25.43 percent YoY to IDR 242128.64 billion (US$ 16.64 billion) in February 2022, missing market forecasts of 40.04 percent, after a 36.77 percent growth a month earlier. This marked the 13th straight month of double-digit growth in arrivals but the slowest growth since February 2021, amid diminishing domestic demand owing to mobility restrictions in the wake of the spread of the Omicron variant.

Arrivals of non-oil and gas grew 14.84 percent to IDR 199930.74billion (US$ 13.74 billion); and those of oil and gas imports jumped 122.52 percent to IDR 42197.90 billion (US$ 2.90 billion). For the January to February period, imports jumped 31.04 percent to IDR 507102.35billion (US$ 34.85 billion), with arrivals of oil and gas climbing 79.67 percent while those of non-oil and gas growing 25.19 percent.

In 2021, purchases surged 38.58 percent to IDR 2854906.20 billion (US$ 196.20 billion).

Indonesia imported products worth IDR 1324141.00 billion (US$91 billion) in the first half of 2021, according to the figures reported by Indonesia's statistics office BPS. This marked a 28.4 percent increase YoY, and it is the highest value in recent years. This is a remarkable upward tendency, given that the economy only grew by 3.1 percent in H1 2021, significantly lower than pre-pandemic levels.

Indonesian Imports increased by 47.93 percent YoY to IDR 310809.36 billion (US$21.36 billion) in December 2021, above the forecasted growth of 39.40 percent. This occurred as a result of a rise in international purchases of everything from consumer items to manufacturing raw materials.

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