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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Sri Mulyani Indrawati has finally stepped down as finance minister after nearly 14 years of steering Indonesia’s economy through crises and reforms. Less than a year into President Prabowo Subianto’s presidency, one of the most capable and respected figures in government has been reshuffled out. The decision has sent shockwaves through financial markets and reignited fears about waning foreign investor confidence. Many are asking if this moment will once again prove to be “Indonesia’s loss, and the world’s gain.”
Her departure carries a striking symbolism. For years, Sri Mulyani has been Indonesia’s most experienced finance minister, providing a steady hand during turbulence, such as during the 2008 financial crisis and COVID-19 pandemic. Sri Mulyani’s reputation extended well beyond Jakarta, bolstered by her tenure as managing director of the World Bank. At home, she became the archetypal technocrat, balancing political demands with fiscal prudence and helping Southeast Asia’s largest economy stay on course.
Speculation about her resignation had circulated for months. A central source of friction was reportedly with President Prabowo’s free nutritious meal program. The flagship program was projected to cost over Rp 340 trillion (US$20.60 billion). The enormous fiscal price tag underscored the widening gap between Sri Mulyani’s cautious approach to state finances and the President’s big-ticket spending agenda. Her first serious resignation attempt came early this year, following an Rp 800 trillion budget cut orchestrated by State Secretary Prasetyo Hadi without her input. Prabowo refused her request to step down, believing her presence would reassure markets during an economic slowdown.
The second rupture came in August, when protests escalated into violent looting targeting several politicians. Sensing the risk, Sri Mulyani left her home and sought protection from Defense Minister Sjafrie Sjamsoeddin and Cabinet Secretary Teddy Indra Wijaya. To her alarm, only 20 soldiers were dispatched to confront around 1,000 looters who ransacked her house. This incident left her shaken and deeply disappointed. Again, she tried to resign, and again she was persuaded to stay.
The end arrived abruptly. Following weeks of speculation, Sri Mulyani was told just one hour before the swearing-in ceremony that she would be replaced, marking the close of an era. Markets reacted immediately. On Sept. 8, the Indonesia Stock Exchange Composite index fell 1.28 percent. Banking stocks led the decline, with Bank Central Asia down 2.27 percent, Bank Mandiri down 2.45 percent and Bank Negara Indonesia down 2.87 percent. In stark contrast, cigarette stocks soared, with HM Sampoerna up 17.76 percent, Gudang Garam up 12.50 percent, Wismilak Inti Makmur up 16.35 percent and Indonesia Tobacco up 11.61 percent. The rupiah’s weakness continued, sliding to Rp 16,433 per United States dollar, further intensifying investor unease.
Her departure deprived Indonesia of one of its most trusted guardians of fiscal discipline. Investor confidence eroded almost instantly, triggering capital outflows and a market downturn that illustrated just how tightly her credibility was woven into Indonesia’s economic story. The reaction has sharpened the lingering question: Can her successor fill her shoes, or has Indonesia allowed one of its brightest minds to slip away, only to see her talent flourish once again on the global stage?
Her replacement, Purbaya Yudhi Sadewa, arrives with a strong résumé. A former chief economist at Danareksa, a post at the now-defunct maritime affairs and investment coordinating ministry, and most recently a commissioner at the Deposit Insurance Corporation (LPS). Yet doubts remain whether his largely academic and institutional background can rival Sri Mulyani’s mastery of fiscal management and crisis response.
Market analysts have been quick to voice concerns. Jason Tuvey of Capital Economics warned of mounting pressure on Bank Indonesia to align with government spending priorities under a more pliant finance minister. Mohit Mirpuri of SGMC Capital went further, calling this the end of Indonesia’s fiscal credibility and raising alarms over renewed capital flight. Purbaya has countered, highlighting his 15 years of market experience and pledging readiness to restore stability.
Sri Mulyani’s exit represents far more than a routine reshuffle, it marks a turning point. For investors, it signals growing uncertainty. For policymakers, it presents a test of fiscal discipline under new stewardship. Whether Purbaya can reassure markets and assert independence will determine not only short-term sentiment but also Indonesia’s long-term economic trajectory. The legacy of Sri Mulyani remains undeniable, and Indonesia must now confront the challenge of sustaining credibility without its most trusted guardian.
