Province

North Sumatra

Overview Economy

North Sumatra, a large salad bowl of people

North Sumatra, whose capital is Medan, ranks as the fourth most populous province in Indonesia, following West Java, East Java, and Central Java, with up to 15.1 million residents as of 2022. Rather than being a melting pot, the province is best described as a large bowl of salad, comprised of diverse ethnicities, cultures, and religions.

Ethnically diverse, North Sumatra is home to several indigenous groups. The Malay people reside along the east coast, while the Batak people inhabit the west coast and the central highlands region around Lake Toba. The Batak people are further categorized into six groups based on region, culture, and location: Pakpak, Angkola, and Mandailing on the west coast, and Toba, Simalungun, and Karo in the central highlands. Additionally, North Sumatra is home to the Nias people, who are natives of the Indian Ocean Island of Nias and its surrounding islets.

Residents of Chinese and South Asian descent together constitute a small but significant minority in North Sumatra, along with descendants of historical migrants from Java and migrants from other surrounding regions. These regions include the Minangkabau people of West Sumatra, the Palembang people of South Sumatra, and the Acehnese.

Furthermore, North Sumatra is home to a predominantly Muslim population, constituting over 60 percent of residents, followed by Christians (Protestant and Catholic) and Buddhists. Despite this great diversity, the province maintains generally harmonious inter-ethnic and inter-religious relations. However, at the same time, primordialism plays a role in both society and political life.

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North Sumatra’s economy, leading sectors

North Sumatra is one of the leading economies on the island of Sumatra, experiencing positive economic growth in recent years. For instance, in 2022, the province's economy expanded by 4.73 percent, a significant increase from 2.61 percent in 2021 and a notable recovery from -1.07 percent in 2020.

Several sectors are driving North Sumatra's economic growth: agriculture, trade, and construction.

As one of the country’s plantation centers, North Sumatra relies on key commodities such as palm oil, rubber, coffee, cocoa, and tobacco in its agriculture sector. Palm oil plantations owned by the people of North Sumatra are primarily concentrated in Asahan regency, accounting for over 15 percent of all palm oil plantations in the region, while coffee (robusta and arabica) is produced in the regencies of North Tapanuli, Simalungun, and Dairi.

Trade is also a key sector in North Sumatra’s economy, with the province exporting agricultural products like coffee, tea, and spices, as well as industrial products, specifically animal and vegetable fats and oils. As of 2022, the leading export commodity is vegetable fats and oils, reaching a significant export value of US$4.71 billion. Typically, these commodity exports from the province find their way to the Asian region, particularly China, as well as the United States. In terms of imports, North Sumatra's imports are predominantly raw/auxiliary materials, followed by capital goods and consumer goods.

Furthermore, North Sumatra's economy has increasingly relied on the non-trade sector, dominated by services, notably construction. North Sumatra’s Regional Gross Domestic Product (GRDP) in the construction sector has risen from Rp 64 trillion (US$4 billion) in 2018 to an estimated Rp 70 trillion (US$ 4.4 billion) in 2022. Moreover, the construction sector has become a major contributor to North Sumatra's employment industry.

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Latest News

May 22, 2025

Medan Mayor Rico Tri Putra Bayu Waas opened the 8th Gelar Melayu Serumpun (Gemes) in 2025 at the courtyard of the Maimun Palace in Medan City, North Sumatra on May 25, 2025. He stated that culture, especially Malay culture, must be a great promotional tool to introduce Medan City to the world.

Amid the pouring rain, the event included in the Tourism Ministry's Karisma Event Nusantara (KEN) calendar of cultural festivals continued to attract public attention. The opening of Gemes 2025 by Tri was marked by the beating of Malay drums, with the mayor showing his ability to beat the drums by playing the zapin rhythm.

Rico said that everyone present had the same spirit and roots, namely Malay culture, which can be the identity and strength of a nation.

"Malay is not just an ethnic identity, but also the soul in pantun, the breath in gurindam, the movement in zapin, the voice in poetry, and the light in customs. I may not have been born as a Malay, but I believe that I have a pure Malay soul," he said.

Rico Waas said that the Maimun Palace building is a symbol of the glory of the Deli Sultanate and a historical heritage in Medan city that must be maintained and promoted.

"Insya Allah, we can promote the culture of Medan City the Gemes event so that the world knows where the Malays come from. Beyond art and culture, we can also introduce Malay identity from the culinary and clothing side," Rico said.

"If we want to be noticed by foreign countries or the world, then culture must be promoted. This is soft diplomacy. How can we be strong in the eyes of foreign countries because of our great culture," he continued.

Gemes 2025 is being held from 21 to 25 May 2025. The festival, which is centered at the Maimun Palace courtyard, was filled with various activities. They include the colossal dance, Malay fashion show, music and dance performances, harmonization of traditional musical instruments, to the micro, small, and medium enterprise (MSME) and creative economy bazaar.

Gemes 2025 was also attended by delegations from several countries, including Malaysia, Singapore, Thailand and India.​

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