The potential of the Indonesian market

Potential market

(posted on 29/07/2014)

Indonesia

...the fourth most populous country in the world, has high domestic consumption and low public debt. These key strengths make it a high-potential emerging nation.

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Indonesia is one of the six countries grouped under the acronym CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa). These emerging countries have a number of points in common: a large and young population, high domestic consumption and virtually no public debt.

Advantages of CIVETS

The Indonesian archipelago has a very young working population (average age 28), more than 30% of whom belong to one of the world’s fastest growing middle classes. Overall purchasing power is increasing and major international brands in all sectors are falling over themselves to woo Indonesian consumers. The capital Jakarta boasts around 100 shopping centres where all the big chains have stores.

Domestic consumption is high, contributing 65% to Indonesia’s GNP. In the last three years, economic growth in the archipelago has been among the highest in the world (up 5.6% in 2013), largely thanks to the Indonesian government’s policies to encourage foreign investment.

Enviable resources

In 2013, Indonesian foreign trade reached USD 370.9 billion, with a slight trade deficit of USD 3.8 billion.
The industrial sector, which is predominantly exporting, accounts for a quarter of GNP. Agriculture is the second biggest sector (14% of GNP). Mining comes third with 12% of GNP. Indonesia is moreover the world’s leading exporter of thermal coal.