Indonesia

WHAT'S NEXT?: Indonesia's GDP is forecast to grow at 5% a year over 2016-2020, supported by strong growth in consumer demand and infrastructure investment. She is likely to be among the star economic performers for at least the next decade but at the same time faces great challenges to overcome past political and social issues.

• [New] In 2018, India was among the countries accounting for the largest shortages in the nursing workforce anticipated by 2030, alongside Bangladesh, Indonesia, Nigeria, and Pakistan.
• [New] Moody's noted that Malaysia, Indonesia and GCC countries will continue to drive corporate sukuk issuance in 2020, and expect that sukuk issuance this year to be in line with volumes in 2018-2019.
• [New] The level of rice consumption is still high and could cause problems for the Indonesian economy unless the food diversification drive begun in the last decade starts to have real impact.
• APAC will continue to dominate the rain-sensing windshield wipers market throughout the forecast period, and countries like China, India, Indonesia, Japan, and South Korea will be the major market contributors.
• The global enzymes market is expected to witness a CAGR of 6.3% annually during the forecasted period of 2020 to 2025, particularly in economies such as India, China, Indonesia and Malaysia.
• For Southeast Asia, Thailand, Malaysia, and Indonesia will take a hit this year, but Vietnam and the Philippines continue to attract investors pulling manufacturing out of China.
• Indonesia is likely to use up 8.3 million tons of palm oil to meet domestic demand for biodiesel this year, raising concerns there will not be enough palm oil left to export.
• Indonesia has set a bioenergy capacity target of 810 megawatts (MW) by 2025, Thailand's goal is 5,570 MW by 2036 and Malaysia aims to achieve 1,065 MW this year.
• China, India, and Indonesia are projected to experience small, but positive rates of economic growth in 2020.
• By the 2040s, the combination of Japan, India and Indonesia is projected to outweigh China in GDP, military spending and population.
• Market players are hoping that 2020 will be a much better year for the domestic capital market, particularly the stock market, as Indonesia's political landscape is expected to stabilize and companies seek to enjoy higher earnings growth.
• Little change in trade flows for toluene in Southeast Asia would be expected in 2019 as countries like Vietnam and Indonesia are likely to remain net short of supply, with the shortfall estimated at 84,000 mt for Vietnam and 132,000 mt for Indonesia in 2019.
• The COVID-19 pandemic, along with lower commodity prices and volatile financial markets, will have severe implications for the global economy and Indonesia this year: Domestic demand is expected to weaken, as business and consumer sentiment wanes.
• If decisive actions to contain the health and economic impacts of the coronavirus outbreak in Indonesia, particularly to safeguard the poor and vulnerable, can be effectively implemented, the economy is expected to gradually return to its growth trajectory next year.
• Ongoing trade disputes between China and the United States, India and Malaysia, and the European Union and Indonesia will likely affect export shipments this year.
• Average palm oil prices will surge 17.9% this year as reduced output in the first half of the year and higher biodiesel consumption in top producers Indonesia and Malaysia tighten the market.
• The central bank is confident that Indonesia's economic prospects in 2020 will remain adequate and are likely to improve due to well-maintained national economic stability and the continuation of economic growth momentum.
• The most-used vegetable oil ended the year with a 44% gain, the best showing in a decade, lifted by concerns dry weather and haze will curb supplies from top growers Indonesia and Malaysia, as well as prospects for strong biofuel demand.
• The Big Five countries globally will be China, India, United States, Brazil and Indonesia by 2025.
• China will be the largest economy in the world by a significant margin, while India could have edged past the US into second place and Indonesia have risen to fourth place.
• Between 2019 and 2025 a total of 54 crude and natural gas projects are expected to commence operations in six countries in Southeast Asia: Indonesia, Malaysia, Vietnam, Cambodia, Thailand and Myanmar.
• Steel demand in the ASEAN region is expected to resume a solid growth momentum driven mainly by numerous government-led infrastructure projects in 2019, as steel consumption in the ASEAN-5 region (Indonesia, Malaysia, Philippines, Thailand and Viet Nam) is expected to grow by 6.2% in 2019.

See full forecast

Last updated: 25 May 2020