Sector
Trading
Indonesia, a developing country rich in natural resources and boasting the 4th largest population in the world, maintains an extensive trade presence. In 2023, the national trade balance reached US$480.7 billion, having grown significantly compared to the pre-pandemic period in 2019, when it stood at US$338.96 billion. Moreover, as of March 2024, the country has officially recorded a trade balance surplus for its 47th consecutive month.
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Trading
Indonesia, a developing country rich in natural resources and boasting the 4th largest population in the world, maintains an extensive trade presence. In 2023, the national trade balance reached US$480.7 billion, having grown significantly compared to the pre-pandemic period in 2019, when it stood at US$338.96 billion. Moreover, as of March 2024, the country has officially recorded a trade balance surplus for its 47th consecutive month.
In terms of exports, Indonesia’s top export commodity has historically been mineral-based fuels, especially coal. However, in the global market, Indonesia is a superpower in the exports of vegetable oils, particularly palm oil, having captured roughly 20 percent of the market with a total export value of US$35.2 billion in 2022. Behind that, Indonesia also leads in nickel exports, with a total export value reaching US$5.8 trillion or 14 percent of global exports.
In 2023, China emerged as Indonesia’s top partner for both exports and imports, with a total annual value of US$62.3 billion and US$62.2 billion, respectively. Meanwhile, the nation’s next top export destination is the US, with a total annual value of US$ 23.2 billion, while the next top import country of origin is Japan, with a total annual value of US$ 16.4 billion.
For trades on the level of individual consumers, the main driver of growth has been the rise in e-commerce throughout the past few years. E-commerce gross market value (GMV) grew by 20 percent from US$48 billion in 2021 to US$58 billion in 2022. This growth persisted to 2023, as e-commerce GMV grew by 7 percent to US$62 billion. E-commerce grew rapidly as it provided a means for Indonesian consumers to maintain access to goods and services during the pandemic period of 2020-2022. However, by the time the pandemic ended, e-commerce had grown ubiquitous and became a staple in the day-to-day lives of the average Indonesian.
Meanwhile, the domestic retail sector in Indonesia is driven by the sale of automotives. The retail of automotives alone in the country reached a gross domestic product (GDP) of US$174.35 billion in 2023, contributing to roughly 13.53 percent of Indonesia’s total GDP of US$1.3 trillion for that year at current market prices. Moreover, the country also achieved a per capita GDP of US$ 4,919.
Strong trade growth followed by increasing access to goods has bolstered local consumer confidence in Indonesia despite the period of uncertainty throughout 2023. According to Bank Indonesia’s monthly consumer confidence survey, Indonesians entered 2024 with high confidence, with the confidence index rising from 123.8 in December 2023 to 125.0 in January 2024. Moreover, this increase is even higher compared to same period the previous year, as a consumer confidence index of 123.0 was recorded for January 2023.
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Garuda Indonesia continues to face deep financial distress, recording a net loss of US$319.39 million (Rp 5.2 trillion) in 2025, nearly five times larger than its 2024 loss. The recurring deficit has raised serious concerns, particularly as the flag carrier received a substantial capital injection of US$1.42 billion from state asset fund Danantara last year to stabilize its operations. Despite this financial support and multiple leadership changes, the national airline has yet to return to profitability, underscoring persistent governance challenges that have plagued it for years.
Founded in 1949, Garuda Indonesia has long symbolized national identity and connectivity, but this historical significance contrasts sharply with its recent performance. Over the past decade, the airline has been embroiled in a series of scandals, including an earnings manipulation case in 2019 and a luxury goods smuggling case in 2020, as well as allegations of bribery, corruption and money laundering related to aircraft procurement. One of the most damaging cases involved former CEO Emirsyah Satar, whose proven role in a bribery case significantly undermined Garuda’s credibility and governance standards and left the company struggling financially to this day.
These governance failures have had lasting financial consequences. Garuda struggled to meet its debt obligations, prompting government intervention in 2022 through a Rp 7.5 trillion state capital injection (PMN). This support temporarily improved its financial performance, allowing the airline to post net profits in 2022 and 2023. However, the recovery proved short-lived and Garuda returned to losses in 2024, recording a net deficit of $69 million (Rp 1.18 trillion).
Its financial health worsened in 2025, driven largely by rising operational costs primarily due to a surge in maintenance expenses, placing the airline under significant pressure. As a result, 15 aircraft operated by its low-cost subsidiary Citilink were temporarily grounded. Management attributed the losses mainly to exchange rate fluctuations and higher fixed costs associated with its fleet recovery program. A total of 43 aircraft were grounded, limiting operational capacity and constraining revenue generation.
With fewer planes in service, Garuda’s revenue declined 6 percent. On the cost side, foreign exchange losses rose sharply while maintenance costs increased 23 percent compared with 2024. These pressures further weakened the airline’s financial position.
Of Danantara’s total capital injection, approximately 64 percent (Rp 15 trillion) was allocated to support Citilink, including for the settlement of obligations to state-owned oil and gas company Pertamina. The remaining Rp 8.7 trillion was earmarked for aircraft maintenance, aimed at increasing the number of operational aircraft from 99 in 2025 to 118 by the end of 2026.
However, financial support alone has been unable to address the underlying governance issues, and leadership instability has only added to the uncertainty. In late 2024, President Prabowo Subianto appointed Wamildan Tsani, a former Air Force pilot and Lion Air Group executive, as Garuda CEO. Less than a year later in October 2025, he was replaced by Glenny H. Kahuripan, Prabowo’s close associate from the military, following a 39.3 percent year-on-year decline in Garuda’s income during the third quarter last year.
At the same time, Garuda appointed foreign executives to strengthen its management team. Former Singapore Airlines executive Balagopal Kunduvara was named finance director and Neil Raymond Mills, previously with Scandinavian Airlines, was recruited as transformation director. These appointments were intended to align Garuda’s management practices with international standards.
Nevertheless, tangible improvements have yet to materialize. Cost efficiency remains limited, with operating expenses declining only 0.7 percent amid falling revenue. Liquidity conditions also remain fragile. Even after receiving an additional Rp 12 trillion in cash, Garuda’s cash ratio stands at just 0.7, indicating that its liquid assets are insufficient to cover short-term liabilities.
Given the situation, Danantara is reportedly mulling over consolidating Garuda with Pertamina subsidiary Pelita Air in the first half of 2026. The plan aims to improve operational efficiency and create synergy across state-owned aviation assets.
However, the proposal is still ongoing. Key details, such as the structure of the consolidation and the method of financial integration, have yet to be clarified. This has raised concerns that the move could serve more as a financial rescue mechanism than a genuine efficiency-driven restructuring effort for the ailing carrier.
Ultimately, Garuda’s continuing losses point to a deeper structural issue, and that financial injections and leadership reshuffles are insufficient without meaningful governance reform. Absent stronger oversight, accountability and operational discipline, the airline risks being trapped in a cycle of recurring bailouts and underperformance.
For Indonesia, the stakes go beyond a single company. As a state-owned enterprise and national symbol, Garuda’s recovery is closely tied to broader questions about the governance of public institutions and the effective use of state resources.
