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Last Published: 2/4/2019

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Indonesia is Southeast Asia’s largest economy with a GDP of USD 1,015 billion in 2017 (USD), ranking 8th in the world based on purchasing power parity, and averaging over 5% growth over the last decade.  President Joko Widodo (known as "Jokowi") took office in October 2014 and pledged  to  improve  infrastructure, diversify the economy, and  reduce barriers to doing  business in Indonesia as a means of increasing economic growth.

Over the past decade Indonesia has enjoyed steady economic growth, though less than needed to pull the country into upper middle-income status.  Sound macroeconomic policies, combined with growing domestic demand and high commodity prices, propelled economic expansion in recent years, but protectionist policies, corruption at all levels of government, poor infrastructure, weak rule of law, and labor rigidity continue to pose challenges.

Beginning in September 2015, the Government of Indonesia (GOI) announced a series of economic reform packages to spur its GDP growth and encourage foreign investment. The announced reforms are a positive signal of the Jokowi administration’s desire to improve the business climate; however, the implementation and impact of the policy reforms remains limited.  Nonetheless, the Indonesian market has many positive attributes.

•Indonesia has a GDP per capita of $3,876 ($12,380 at PPP according to IMF) that exceeds many of its ASEAN neighbors such the Philippines and Vietnam, and with 262 million people, Indonesia’s economy comprises nearly half of ASEAN economic output.
•Indonesia is a thriving democracy with significant regional autonomy. It is located on one of the world’s major trade routes and has extensive natural resource wealth distributed over an area the size of the United States and comprised of 17,508 islands.
•The World Bank in 2017 classified 20% of Indonesia’s population as middle class and reported that this cohort was responsible for 43% of domestic consumption.

•In 2017 the number of internet users in Indonesia reached 143 million people or 54% of the population. Indonesians are among the most active users of social media such as Facebook, Twitter and Instagram.

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