The economy of Indonesia is the largest in Southeast Asia and is seen as one of the emerging market economies of the world with the greatest potential for future growth.

Indonesia is a member of G20 and is classified as a newly industrialised country. It is the 16th largest economy in the world by nominal GDP and the 7th largest in terms of GDP 

Recent Macro

Recent Macro

  • Incumbent president Joko Widodo was re-elected in 2019 - a result which is seen as positive for the continued steady growth of the country’s economy

  • Indonesia's annual economic growth eased slightly to 5.02% in the third quarter of 2019 from 5.05% in the previous quarter

  • GDP Annual Growth Rate in Indonesia averaged 5.27% from 2000 until 2019, reaching an all time high of 7.16% in the fourth quarter of 2004 and a record low of 1.56% in the fourth quarter of 2001

  • Growth forecasts suggest GDP will remain stable in 2020 before picking up slightly in 2021 (IMF)

  • Indonesia ranked 73rd in the World Bank’s Ease of Doing Business Index

  • The Gross Domestic Product per capita in Indonesia was last recorded at US$ 4284 in 2018

  • GDP per capita in Indonesia averaged US$ 1853 from 1960 until 2018 (source: World Bank)
Key info

Key info

Currency

  • Currency of Indonesia is the Indonesian Rupiah (IDR) - often property prices are pegged to the US$

Climate

  • Moist tropical climate with high even temperatures all year round

  • Annual range from the low 20’s to low 30’s ℃ (mid 70’s to upper 80's ℉)

  • Main wet season is December - March and the dry season is May - October 

Tax

  • Non-residents are subject to withholding tax of 20% on gross income

  • Transfer tax is levied on the sale of property at a flat rate of 5%
Hospitality

Hospitality

  • Travel & Tourism in Indonesia grew by 7.8% in 2018 (latest figures) – double the global average of 3.9%

  • Tourist arrivals surged 12.6% to 15.8m people in 2018 from a year earlier. 2017 arrivals were over 14m, up more than 2m from 2016.

  • Indonesia’s star-rated hotels across the 34 provinces hosted 93.4 million room nights in 2017, up 16% from 80.4 million in 2016

  • From 2012-2017 the demand for star-rated hotels (room nights occupied) has grown at a robust CAGR of 24.7%, compared to 17.4% over the ten-year period 2007-2017

  • Revenue in the Hotels segment is forecast to amount to US$4,264m in 2020
Property

Property

  • Property prices have remained stable for a number of years with moderate increases of 3-4% over the past few years

  • Foreigners cannot own freehold properties or land in their own names

  • Foreigners can own properties through a leasehold structure and the normal maximum lease length is 80 years

  • Notary / legal fees for purchasing property are generally between 1-2% and paid by the buyer
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