Indonesia’s economy has rebounded from the COVID-19 recession and inflation has come down significantly.

GDP growth is projected to remain robust at 5.2% in 2025.

To further improve living standards, Indonesia needs to strengthen productivity, enhance digitalisation and continue advancing towards net-zero emissions.

There is scope to lower barriers to foreign investment and trade, improve the performance of state-owned enterprises and deepen workforce skills.

To accelerate growth:

• Reduce the number of sectors where import and export quotas apply.
• Develop further the strategy on state ownership.
• Improve and harmonise secondary-school curriculums.

The digital sector represents a growing share of the economy, but infrastructure needs are only partly met.

Businesses are slow to adopt digital tools, and more digital skills are needed.

To enhance digitalisation:

• Boost support for SMEs to adopt digital tools.

• Include more digital skills in school curriculums. 

• Establish an independent and well-resourced communication regulator.

Indonesia is vulnerable to the effects of global warming.

Indonesia has set an ambitious goal of reaching net-zero GHG emissions by 2060.

To confront climate change:

• Reduce energy subsidies.

• Accelerate the phase-out of coal-fired power generation.

• Increase investment in public transport.

To learn more, read the OECD Economic Survey of Indonesia 2024.