Indonesia economic analysis

Topics: Indonesia, Population, Economics Pages: 13 (3810 words) Published: October 15, 2013
Executive Summary

The following report details our research and results regarding the economic climate of the Republic of Indonesia. Following our recent cultural analysis, we followed the similar practice of finding several sources, extracting the most vital information, and summarizing our findings into a coherent analysis. Ultimately, we feel that this analysis will provide a comprehensive look into Indonesia’s current economic condition, as well as provide insight in the future and direction of the country’s economy.  

This report will contain an abundance of information regarding the Indonesian economy. More specifically, this report will detail topics such as population, GDP, distribution of wealth, natural resources, principal industries, and several others.  

Indonesia is a growing global economy. Home to the fourth largest population in the world, Indonesia is a densely populated country. With a large labor force, (42.2 percent of people are 25-54 years old) Indonesia has a plentiful amount of human resources to be able to capitalize on future opportunities. In addition to the abundant labor pool, a moderately high birth rate and lower death rate are attributing to a continuously growing population.  

In 2012, Indonesia reported GDP of $1.237 trillion USD, and anticipates that that number will grow on average 5.8 - 6.2 percent until 2018. In addition, Indonesia is pursuing fiscally conservative practices which are decreasing the debt-to-GDP ratio, down from 60.5 in 2004 percent to just over 23 percent in 2012. About half of Indonesia’s debt is held externally. Indonesia’s distribution of wealth estimates that 98.7 percent of the population possesses a net wealth of below $100,000 USD; comparable to India, where 99 percent of the population is under the $100,000 USD mark. The average household income in Indonesia falls between $2,100 to $3,000 USD annually.  

Indonesia’s natural resources have been a catalyst to recent economic growth. The nation has a wealth of petroleum, coal, precious metals, and other minerals. Drilling for oil and the recent increase in mining have boosted the economic output of Indonesia. Indonesia also has a large timber and logging industry. The two largest industry sectors in Indonesia, however, are agricultural and services. 87.2 percent of the labor force belongs to one of these two sectors.  

Indonesia has a promising economic future. A growing population, wealth of resources, and fiscally responsible practices are producing welcomed results for the nation. As Indonesia continues to produce and exploit these competitive advantages, we expect to see their economy continue to grow at an above-average rate. As their economy gets larger, we also expect to see an increase in average wealth among the population, as well as an evolving wealth distribution. We believe Indonesia to be an attractive market, and expect that expansion to continue to attract foreign investment and modernization. Introduction

This report will cover a wide range of topics that impact the economic situation of the Republic of Indonesia. Through our research, we have compiled, summarized, and presented information that is vital to understanding the current and future outlook for Indonesia’s economy. The following sections provide insight to critical areas, leading up to our outlook and predictions for the expanding nation.


By area, Indonesia is the world’s fifteenth largest country in the world. Despite the limited space, Indonesia boasts the world’s fourth largest population after China, India and the United States – and the population keeps growing. Official 2010 census results published the Indonesian population figure at over 237 million people. However, in 2013, the UN released their mid-year population estimates, publishing a population for Indonesia of 247 million people. That growth equates to a population increase of more than 4 percent in three years....
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