Anushree 8th largest economy in terms of purchasing

Anushree Khandelwal
House A
Indonesia report
Socioeconomic situation
Indonesia is a country located in the southeast part of Asia between India and Pacific Ocean. It consists of 17000 islands with more than 300 ethnic groups residing in the country. It is 4th most populous nation in the world.

Indonesia has become the 4th largest economy of Southeast Asia and 8th largest economy in terms of purchasing power parity (PPP). It is regarded as the middle-income country but has shown drastic increase in Human Development Index (HDI) in recent years.

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The Gross Domestic Product (GDP) of the country is averaged over 5% per annum but it has shown a little bit of slowdown in growth since 2014, therefore the country requires inclusive economic development.
GDP and its components
Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period CITATION Gro18 l 1033 (Gross Domestic Product- GDP, 2018).

Gross Domestic Product of Indonesia is calculated on the quarterly basis.

The components of GDP are-
Government purchase
Net exports

   2013  2014  2015  2016  2017  2018
Nominal GDP(in billion USD) 915.0 891.0 861.0 933.0 GDP(annual % change)   5.6   5.0   4.9   5.0   5.1 GDP per Capita(in USD) 3,528 3,442 3,329 3,603 Year Quarter I Quarter II Quarter III Quarter IV
2018     5.06 2017     5.01     5.01      5.06      5.19
2016     4.92     5.19      5.01      4.94
2015     4.71     4.66      4.74      5.04
2014     5.14     5.03      4.92      5.01
2013     6.03     5.81      5.62      5.72
2012     6.29     6.36      6.17      6.11
2011     6.45     6.52      6.49      6.50
2010     5.99     6.29      5.81      6.81
2009     4.60      4.37      4.31      4.58
From the graph above about the GDP of Indonesia in past years, it can be seen that there is constant growth in GDP. The trend depicts that GDP has picked up growth up to 5.19% in last quarter of 2017 from 5.06% in the previous quarter. It has also rose from 4.92 % in first quarter of 2016 to 5.19% in second quarter of 2017. This was highest growth rate in 4 years. CITATION Eco171 l 1033 (Economic Growth Indonesia: GDP at 5.02% in 2016, Not Good, Not Bad, 2017)It can also be seen that the growth rate was almost constant in all these years. The reason for this growth in 2017 was also due to public investments and stronger net exports, which were lifted by improved global trade and recovery in commodity prices. CITATION Wor181 l 1033 (World Bank 2018, 2018)
Components of GDP-

Commercial trade relations between India and Indonesia

(retrieved from-
India is the largest importer of Palm oil from Indonesia. It is also second largest trading partner in ASEAN countries. The data above is of 2016. It can be seen that India has imported a total of $12.18 billion while imported a total of $3.13 billion. CITATION Bil171 l 1033 (Bilateral Trade Relations between India and Indonesia 2016 , 2017)As India’s driving factors are railways, IT, pharmaceuticals, etc. which are lacking in Indonesia, it can be seen from the graph above about India’s exports of Indonesia, machineries, organic chemicals are largely exported to Indonesia.
Also, Indonesia is huge producer of crude oil and mineral fuels like coal, which lacks in India, this is largely imported to India.
From the above statistics about imports and exports between the two countries, this can be concluded that the country shares good trade relations and is benefitting each other with its resources.
Consumer Price Index

Retrieved from: (
The CPI has decreased slightly from 134.14 in July to 134.07 in August. The CPI is calculated averagely at 74.97 index points since 1996 until 2018, increasing all time high 133.77 in June of 2018 and a record of low 19 index points in January of 1996. CITATION Ind1 l 1033 (Indonesia Consumer Price Index, n.d.)In Indonesia, the CPI is divided into the important categories like food and non-alcoholic beverages—17%, Transport—16%, Restaurants and Hotels—10%, Utilities—9%, Misc. Goods and Services—8%, Health—10%, Recreation and Culture—10%, Clothing and Footwear—8%, Furnishing and Household Equip.—6%, Alcoholic Beverages, Tobacco, Comm. And Education—6%
GDP Forecast
The forecast for 2 years of Indonesia about its GDP indicates that the commodity prices will remain relatively low in the coming future and that Indonesian policy makers are unable to stimulate the economy as they are running out of scope. CITATION Eco1 l 1033 (Economy of Indonesia, n.d.) 
According to the World Bank, the highest level of GDP reached in Indonesia was during 2010 which was 6.4%. the increases started after 2015 and is predicted to continue not only in short term but long term. The reason for this increase in GDP is due to improvement in infrastructure quality. According to data by Price Waterhouse Coopers, the country will become the 5th largest economy in the world with the GDP of $5.424 trillion. CITATION Eco1 l 1033 (Economy of Indonesia, n.d.) 
Indonesia is the new emerging market in terms of new businesses and foreign investments. Due to the recent common wealth games, there has been a boom in foreign investments.
•        There are many small and medium sized enterprises which are very active and contribute to the economy in huge percentage.
•        Indonesia is also very rich in mineral fuels and crude oil which is in high demand not only in Asia but all over the world. it has been the country’s asset for a long time and will continue to be its asset if used wisely.
•        The forecast saying that it will be 5th largest economy in the world might seem to be a little difficult right now looking at the current condition but if the country continues to improve its commodity prices and foreign investments continue to grow, this situation might be possible.

BIBLIOGRAPHY Bilateral Trade Relations between India and Indonesia 2016 . (2017, September 27). Retrieved from Expert genius Blog:
Economic Growth Indonesia: GDP at 5.02% in 2016, Not Good, Not Bad. (2017, February 06). Retrieved from Indonesia-Investments:
Economy of Indonesia. (n.d.). Retrieved from Indonesia-Investments:
Gross Domestic Product- GDP. (2018). Retrieved from Investopedia:
Hossein, N., Nurbani, R., Utari, V., & Suharyo, W. (n.d.). Empowerment of women and Girls. Retrieved from interactions eldis:
Indonesia Consumer Price Index. (n.d.). Retrieved from Trading Economics:
World Bank 2018. (2018, March 27). Indonesia Continues to Build on Solid Economic Growth. Retrieved from The World Bank:


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