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Indonesia - The World’s Next Economic Power
Chairul Tanjung
Chairman of National Economic Committee (KEN)
KOMITE EKONOMI NASIONALREPUBLIK INDONESIA
page 2
Indonesia Future Outlook
Key Economic Drivers
Looking to the long term, Indonesia will become a high income country
page 3
$3,005 $5,300$9,000
$14,900$22,500
$30,400
$38,600
$46,900
2010 2015 2020 2025 2030 2035 2040 2045
GDP Nominal (US$ Billion) 711 4,257 9,706 16,578
Population (Million people) 237
PREPARATION ACCELERATION CONTINUATION
6,7932,4161,335 12,989
286 319 353302269253 336
GDP Nominal per capita
Indonesia becomes a high income country with GDP
per capita USD 14,250-USD 15,500
Indonesia’s economic growth has far surpassed the projections of the Indonesia Forum Foundation
page 4Source: Indonesia Forum Foundation (Yayasan Indonesia Forum), team analysis
Projected GDP per capita - Indonesia Vision 2030
Lower MiddleIncome Country
Upper MiddleIncome Country
HighIncome Country
1992 2015 2023
Indonesia Vision 2030
Economic Projection 2011 - 2045
GDP per capita reached
US$3,005 in 2010
IMF projects Indonesia to achieve the second fastest growth amongst the world’s 18 largest economies during 2009-2015
page 5Source :International Monetary Fund, World Economic Outlook Database, April 2011
GPD Nominal Growth (2009 – 2015)
15.7%
14.5%
12.4%
12.1%
11.7%
10.0%
9.9%
4.1%
4.0%
9.6%
Indonesia
Russia
China
India
Brazil
Turkey
South Korea
Japan
USA
ASEAN (excl. Indonesia)
Indonesia’s economy will become more dominant in ASEAN and larger than several countries in Europe
page 6Source: International Monetary Fund, World Economic Outlook Database, April 2011; Proyeksi Ekonomi Indonesia 2011 – 2045; Analisa Tim
Indonesia Economic Growth (nominal) (USD Billion)
Indonesia’s economy as % of
ASEAN-6
ASEAN (Total 11 Countries)
40% 48% 53%
38% 46% 52%
Spain
Netherlands
50% 91%60%
91% 165%105%
European Countries:
CAGR 14.5%
page 7
Indonesia Future Outlook
Key Economic Drivers
The increase of the productive population will fuel stable and rapid economic growth
page 8
Expected Population Pyramid (2000–2020)Expected Population Pyramid (2000–2020)
15 12 9 6 3 0
05101520253035404550556065707580859095100
15 12 9 6 3 0
05101520253035404550556065707580859095100
0 3 6 9 12 15
05101520253035404550556065707580859095100
Male Indonesia–2000 Female
Population (in millions)
0 3 6 9 12 15
05101520253035404550556065707580859095100
Male Indonesia–2020 Female
Population (in millions)
Total (million) 205 254
Male (million) 102 127
Female (million) 102 127
Productive population (20–55 years old) 99 (48%) 132 (52%)
Source: 2008 UNDP World Population Prospects
Natural Resources, Infrastructure and Consumers will also drive economic growth
page 9
Based on 2010 GDP per capita (US$3,005), Indonesia has reached the critical threshold rapid growth in consumption, discretionary and luxury spending
Rise of Consumer Spending
Power
• Consumero Financial Serviceso Automotiveo Retailo Tourismo etc.(as well as supporting
sectors such as industry and construction)
Natural Resources
Economic growth, including key emerging markets driving demand
– Hard commodities, e.g. metals, oil, coal, etc.
– Soft commodities, e.g. rubber, palm oil, etc.
Continued development of infrastructure: transportation, energy, communications, water & waste, etc.
Infrastructure
This economic growth is also supported by conducive national conditions
page 10
Political Environment
Resilient Financial System
Maturing democracy Regional autonomy Supportive regulations balanced open markets Strengthening institutions
Government debt and foreign reserves at healthy levels Improving investment climate Indonesian banks performed well during global crisis
Increasingly integrated networks
Regional – improving efficiency of domestic production and distribution chains
Global – geographic position provides excellent access to India, China, Japan, etc.
Indonesia has entered the Golden Era of economic growth huge opportunities for businesses
page 11
711 711
3,546
2010 2025
Indonesian economy will grow 5-fold through 2025
The stable government combined with strong economic growth will provide great opportunities for all businesses
Currently China already has 115 people in Fortune's list of World Billionaires, while Indonesia has only 14 people. By 2025, the number of Indonesian billionaires could surpass 115
4,257
Projection of Indonesia’s GDP Growth in 2025
(USD Billion)
Source: Masterplan Percepatan dan Perluasan Pembangunan Indonesia
Closing
page 12
Indonesia’s is expected to continues its strong performance
This robust growth is driven by favorable demographics, strong natural resources and consumer sectors and developing infrastructure, as well as broad based geographic growth
Indonesia is moving forward to address challenges in funding, infrastructure, bureaucracy, human resources, and technology
Indonesia’s economy is projected to grow 5-fold by 2025, thereby making Indonesia the world’s next economic power
Thank You
Chairul TanjungChairman of National Economic Committee (KEN)
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