Powering Growth: Indonesia’s Export Success and Economic Outlook for 2024

Indonesia is widely recognized as a rapidly growing economy with significant potential for investment and business expansion. The country offers abundant opportunities for investors and entrepreneurs, thanks to its wealth of natural resources, including high-quality oil, tin, bauxite, nickel, manganese, lead, copper, zinc, chromium, gas reserves, and precious stones.

Indonesia is a leading global exporter, holding the top position in palm oil, the fifth in liquefied gas, and exporting large quantities of coal, tin, agricultural products (such as natural rubber, copra, coffee, tea, and spices), along with tropical timber and wood products.

The Indonesian government actively supports the country's economic development by creating favourable conditions and closely monitoring the economy and geopolitical landscape. Despite global challenges, Indonesia continues to take steps to harness its natural resources, boost the competitiveness of its exports, minimize the risk of financial instability, and enhance the profitability of production in collaboration with its key trading partners.

In March 2024, Indonesia posted a trade surplus of USD 4.47 billion, continuing the positive trend of exports exceeding imports that began in May 2020. This figure is USD 1.64 billion higher than the surplus recorded in February 2024 and significantly above the USD 2.83 billion surplus from March 2023. From January to March 2024, Indonesia’s export surplus reached USD 7.31 billion.

Indonesia’s neutral political stance and strategic location make it an attractive hub for global investors. With a population of 280 million, Indonesia’s online services market is booming, valued at USD 77 billion in 2022 and expected to reach USD 130 billion by 2025. Tech giants like Gojek and Tokopedia have merged to launch an IPO in the U.S., while Apple, Microsoft, and Tesla are expanding their presence in the country.

Febrio Kacaribu, Head of the Fiscal Policy Agency at the Ministry of Finance, praised Indonesia’s economy, stating, “We must be grateful for our success, especially in the face of global economic uncertainty. Indonesia’s trade surplus reflects the country’s strong domestic economic resilience.”

From January to June 2024, exports from Indonesia’s manufacturing sector (excluding oil and gas) grew by 0.40% compared to the same period in 2023. Similarly, exports from the agricultural, forestry, and fisheries sectors increased by 6.73%, while exports from mining and other industries declined by 15.05%.

In June 2024, Indonesia's largest non-energy export market was China (USD 4.65 billion), followed by the U.S. (USD 1.97 billion) and India (USD 1.84 billion), with these three countries accounting for 43.13% of total exports. Exports to ASEAN and the European Union (27 countries) totaled USD 3.62 billion and USD 1.21 billion, respectively.

West Java was the top exporter from January to June 2024, contributing USD 17.99 billion (14.39% of the total), followed by East Kalimantan with USD 12.57 billion (10.04%), and East Java with USD 12.20 billion (9.76%).

Overall, Indonesia’s exports from January to June 2024 amounted to USD 125.09 billion, a 2.76% decrease from the same period in 2023. The value of non-energy exports, totalling USD 117.19 billion, also dropped by 2.99%. Among the highest-value exports, most raw materials showed growth, particularly mechanical equipment, which saw a USD 263.6 million increase (26.66%). However, animal and vegetable fats and oils declined by 14.32%.

Despite some declines, Indonesia’s GDP in purchasing power parity (PPP) terms reached USD 4.73 trillion, making it the third largest economy in Asia and the tenth largest globally.

In March 2024, Indonesia's total exports reached USD 22.43 billion, marking a 4.19 percent decline compared to the same period last year. However, exports showed a strong rebound from the previous month, increasing by an impressive 16.40%, driven largely by rising global commodity prices, particularly for coal and precious metals.

By June 2024, most of the top ten non-energy export products saw price declines. The steepest drop occurred in precious metals and jewellery/gems, which fell by USD 440.5 million (45.76 percent). Animal and vegetable fats and oils also experienced a significant decrease, dropping by USD 1,091.5 million (68.06%).

China continues to be Indonesia's largest trading partner, representing 22.44% of Indonesia’s total exports. However, the recent slowdown in China’s economy, driven by its real estate crisis, has had a negative impact on trade between the two countries. In particular, mining exports have decreased.

On the positive side, Indonesia’s agricultural exports are growing steadily, supported by increased demand from key partners like the U.S. and India.

In June 2024, Indonesia’s imports totalled USD 18.45 billion, down 12.76% compared to the same period last year. This decline was driven by a 16.72% drop in non-energy imports, despite a 10.34% rise in oil and gas imports. From January to March 2024, Indonesia’s total import volume reached USD 54.90 billion.

In May 2024, the value of imports reached USD 19.40 billion, showing a 14.82% increase in the volume of goods imported, but an 8.83% decrease in total value compared to the same period last year. Non-energy imports totalled USD 16.65 billion, with a 19.70% rise in tonnage, though still an 8.23% decline compared to the previous year. Gas imports were valued at USD 2.75 billion, reflecting a 7.91% decrease in the volume of imports and a 12.34% decline in value compared to the same period last year.

Imports were primarily categorized into raw materials and auxiliary materials, followed by capital goods and consumer goods. The largest increases in non-oil and gas imports came from China, the U.S., and Thailand, while the Netherlands experienced the sharpest decline in non-oil and gas imports.

Wine: Bali’s wine industry has seen remarkable sales growth, particularly Hatten Wine. The company projects significant increases in wine consumption and distribution across Jakarta and other regions in the second half of 2024. According to Financial Director Ketut Sumarwan, operating profit surged by 19.45%, rising from IDR 22.80 billion in 2023 to IDR 27.24 billion in 2024.

This growth was driven by a 24.85% increase in foreign tourists to Bali, reaching 3.1 million by June 2024. The winery reported a profit of IDR 21.08 billion in the first half of 2024, a 17.08% rise compared to the previous year. Total revenue grew by 12.07% to IDR 123.28 billion, while gross profit increased by 12.5%, reaching IDR 56.51 billion.

Ida Bagus Rai Budyarsa, founder of PT Hatten Bali, credited this strong revenue and profit growth to rising wine consumption both on and off the island.

Nickel: Indonesia is the world’s largest nickel producer, controlling more than half of global production. The country manages the entire value chain—from raw materials to electric vehicles and batteries—which significantly boosts its economic growth.

The World Economic Outlook (WEO) report, released in April 2024, forecasts global growth at 3.2%, still falling short of historical averages.

In 2024, global trade faces several key challenges, including geopolitical tensions, volatile exchange rates, and financial sector instability. Additionally, the economic slowdown in China, Indonesia’s primary trading partner, raises further concerns. However, despite these challenges, Indonesia’s non-energy exports grew in May 2024 compared to April. Export growth was recorded in major markets such as China, the U.S., and Japan, along with increased exports to ASEAN countries and the European Union.

Despite global economic challenges, Indonesia’s export performance and trade activities have surpassed analysts’ predictions. The country is becoming increasingly appealing to international investors due to its fast-paced economic growth, youthful and dynamic population, infrastructure development, strategic location, and wealth of natural resources.

According to Indonesia’s statistical agency, the country’s GDP grew by 5.05% in the second quarter of 2024. This represents a 15-fold increase, pushing GDP to USD 1.5 trillion, making Indonesia the third-largest economy in Asia, behind only China and India—an outcome that exceeded expectations.

The rapid growth has been driven primarily by the manufacturing, construction, and trade sectors. With each milestone and strong export performance, Indonesia’s economy continues to thrive and expand.

Sources: Neraca Perdagangan Indonesia, Badan Pusat Statistik, Balidiscovery.com