ECONOMY
Indonesia, currently the 18th-largest economy in the world, is experiencing remarkable economic growth. |
Indonesia is a country that contains great economic potential; a potential that has not gone unnoticed to part of the international community. Indonesia - Southeast Asia's largest economy - is increasingly mentioned as an appropriate candidate to be included in the BRIC countries (Brazil, Russia, India and China) as the country is rapidly showing signs of similar newly advanced economic development. Recently, a new set of emerging economies has gained public attention. Members of this set are countries that contain promising markets with diverse economies, reasonably sophisticated financial systems and fast-growing populations. These countries are grouped under the acronym CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa), and its combined Gross Domestic Product is predicted to account for half the global economy by 2020.
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Indonesia's private consumption is accounted for 56 percent of the country's economic activity and future projections indicate that it is to grow further. |
Prudent financial macroeconomic policy is one reason why Indonesia was resilient to the global financial crisis of 2008-2009. Both public and private debt have fallen sharply (as a percentage of GDP), international reserves have grown fast and inflation has been under control. In combination with relative political stability and certain favorable demographic trends it provides opportunities for strong economic performance over the medium term. Regarding the longer term, the Indonesian government aims to be in the top six of largest global economies by the year 2030.
Another key element that accounts for Indonesia's recent economic growth is domestic consumption. In line with rising per capita GDP and low borrowing costs, Indonesia's private consumption is robust. It accounted for 56 percent of the country's economic activity in 2011 and future projections indicate that it is to grow further. Despite such positive conditions Indonesia remains a complex country from a business, social and political perspective. |
Sources: Indonesia Investment, Bappenas, World Bank, Statistics Indonesia, Bank Indonesia and International Monetary Fund (IMF): 2016