APAC markets to watch: Key economic insights

CPA Australia members: 491

Overview

With GDP growth of 5 per cent in 2024, the Indonesian economy has proven its resilience, supported by strong domestic investment and consumption.

As the economy and its industries digitise rapidly following the guidance of the Making Indonesia 4.0 road map, the digital economy itself is projected to reach a value of US$130 billion (A$202 billion) by the end of 2025.

The road map is underpinned by several strategies, including the 100 Smart Cities program and the National Strategy for Artificial Intelligence, both of which are boosting innovation and infrastructure.

Major sectors

• Manufacturing
• Wholesale and retail trade
• Agriculture, forestry and fishing

Key business attractions

A relatively large (285 million) and young (median age 30.4) population provides a vast consumer base in Indonesia, with the fast-growing digital economy underpinning the ability to promote and sell into this market.

Indonesia attracted US$475 billion (A$739 billion) foreign direct investment (FDI) in 2023, a 13.7 per cent year-on-year (YOY) increase, showing enormous confidence in the market.

Skills in demand

1. Data analysis and visualisation
2. IT support
3. Digital marketing and ecommerce

Local insight

One of the biggest business challenges in Indonesia, says Andy Rahardja CPA, finance director at IDS Medical Systems, is the need to navigate hurdles such as regulatory inconsistency, high operational costs and underdeveloped infrastructure in certain areas.

“These dynamics highlight the importance of strong stakeholder engagement, legal clarity and long-term commitment to doing business responsibly,” Rahardja says.

“Despite these challenges, Indonesia offers strong fundamentals: a young workforce, a growing digital economy, and increasing regional relevance. Businesses that invest in building local relationships, understanding the regulatory environment and taking a long-term view are well positioned to thrive.”

Businesses entering the market, Rahardja says, must spend time analysing and understanding regional variations in consumer behaviour and tailoring their strategy to Indonesia’s evolving market segments, especially as changes in the middle class affect purchasing power. Ignoring cultural nuances can lead to costly mistakes.