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HANNOVER MESSE 2020, 20 - 24 April
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Partner Country 2020

Indonesia - Economy and investment

Indonesia is an emerging economic power, and is currently transforming from an exporter of commodities to an exporter of goods and services.

Indonesia as a business and investment location
Indonesia is an emerging economic power, and is currently transforming from an exporter of commodities to an exporter of goods and services.

Over the past few years, Indonesia has recorded steady annual growth of around five percent in its gross domestic product (GDP). In 2018, Indonesia’s GDP amounted to some USD 1 trillion, corresponding to a per capita GDP of USD 3,871. This makes the G20 nation the largest economy in Southeast Asia and one of the leading ASEAN nations. Indonesia’s industrial sector accounts for around 40 percent of GDP.

In an international comparison of economies, Indonesia currently ranks 16th. In terms of purchasing power, Indonesia actually ranks among the top ten.

The country’s political stability and investment-friendly attitude are conducive to growth. The Indonesian government’s development program is intended to advance the country’s economic vitality.

The objectives of the program include expanding industrial supply chains, improving production efficiency and promoting innovation. This will increase the Indonesian demand for energy as well as for energy-efficient industrial production methods. Sustainability also has a role to play here. In addition to renewable energies, the focus is on electric vehicles and biofuels. Our economic development focus is on the sectors of agriculture, mining, energy, industry, tourism and telecommunications.

The current government of Indonesia has launched numerous other economic programs, including programs to promote domestic and foreign investment through measures like tax incentives, deregulation and improved infrastructure. In addition, privileged special economic zones have also been established.

Mineral resources and minimally processed primary goods account for the largest share of Indonesian exports. The most important foreign trade partners are other Asian countries which, like Indonesia, belong to the ASEAN Free Trade Area.

Germany and Indonesia have maintained amicable diplomatic relations for 60 years. Although neither country counts among the other’s leading sales markets, important economic relationships do exist. The trade volume between Germany and Indonesia amounted to more than USD 6 billion in 2017. Germany’s exports to Indonesia consist mainly of machines, chemical products, measuring and control technology, electrical engineering, electronics, vehicles and vehicle parts. Indonesia in return exports mainly textiles, shoes, electronics, food and raw materials to Germany.

Leading economic advisors see good prospects for Indonesia to become one of the world’s ten largest economies by 2030 on the basis of its continuous growth and development. This is also Indonesia's declared goal, which is to be achieved, among other things, by means of the "Making Indonesia 4.0" initiative.

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