Indonesia GDP to top Germany by 2030
Indonesia, Southeast Asia’s largest economy and most populous nation, is likely to continue mounting global economic headwinds on the back of its youthful growing domestic market, making it the world’s seventh largest economy by 2030, a report released by McKinsey Global Institute on Tuesday showed.
Currently the world’s sixteenth largest economy, if the forecast growth is envisioned Indonesia’s economic clout would surpass that of developed nations such as Germany and the UK.
The report estimates that 86 per cent of GDP will derive from urban centers by 2030, with strong growth coming from outlying cities.
“The greater areas around Jakarta and Surabaya are the economic powerhouses of Indonesia today, but we expect strong growth in cities like Pekanbaru, Pontianak, Makassar and Balikpapan which are all outside of Java [in Sumatra, Kalimantan and Sulawesi],” Raoul Oberman, Chairman of McKinsey & Company, said.
Indonesia’s current $850 billion economy sits on the shoulders of Java, the most populous island in the archipelago, also considered to be the most densely populated island in the world. Home of Jakarta, the nation’s political and economic capital, the island contributes a substantial $695 billion to nominal GDP.
However, a groundswell in a young middle class will add an additional 90 million consumers by 2030, making Indonesia’s “consuming class stronger than in any economy of the world apart from China and India,” according to the report.
This emerging class will continue to be a prominent part of the society, a trend Jakartan officials call Indonesia’s “demographic dividend.”
McKinsey estimates that 70 per cent of the country’s population will remain of working age of between 15 and 64 in the next 18 years.
In the short-term, the Indonesian government is targeting $41 billion worth of investment by 2013.
Already the largest exporter of thermal coal in the world, the archipelago is also rife with a number of other natural resources, such as natural gas and coalbed methane.
[caption id="attachment_4593" align="alignleft" width="300"] Supermarket in Jakarta: Indonesia is growing on the back of its youthful domestic market[/caption] Indonesia, Southeast Asia’s largest economy and most populous nation, is likely to continue mounting global economic headwinds on the back of its youthful growing domestic market, making it the world’s seventh largest economy by 2030, a report released by McKinsey Global Institute on Tuesday showed. Currently the world’s sixteenth largest economy, if the forecast growth is envisioned Indonesia’s economic clout would surpass that of developed nations such as Germany and the UK. The report estimates that 86 per cent of GDP will...
Indonesia, Southeast Asia’s largest economy and most populous nation, is likely to continue mounting global economic headwinds on the back of its youthful growing domestic market, making it the world’s seventh largest economy by 2030, a report released by McKinsey Global Institute on Tuesday showed.
Currently the world’s sixteenth largest economy, if the forecast growth is envisioned Indonesia’s economic clout would surpass that of developed nations such as Germany and the UK.
The report estimates that 86 per cent of GDP will derive from urban centers by 2030, with strong growth coming from outlying cities.
“The greater areas around Jakarta and Surabaya are the economic powerhouses of Indonesia today, but we expect strong growth in cities like Pekanbaru, Pontianak, Makassar and Balikpapan which are all outside of Java [in Sumatra, Kalimantan and Sulawesi],” Raoul Oberman, Chairman of McKinsey & Company, said.
Indonesia’s current $850 billion economy sits on the shoulders of Java, the most populous island in the archipelago, also considered to be the most densely populated island in the world. Home of Jakarta, the nation’s political and economic capital, the island contributes a substantial $695 billion to nominal GDP.
However, a groundswell in a young middle class will add an additional 90 million consumers by 2030, making Indonesia’s “consuming class stronger than in any economy of the world apart from China and India,” according to the report.
This emerging class will continue to be a prominent part of the society, a trend Jakartan officials call Indonesia’s “demographic dividend.”
McKinsey estimates that 70 per cent of the country’s population will remain of working age of between 15 and 64 in the next 18 years.
In the short-term, the Indonesian government is targeting $41 billion worth of investment by 2013.
Already the largest exporter of thermal coal in the world, the archipelago is also rife with a number of other natural resources, such as natural gas and coalbed methane.
