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.
Latest News
Morgan Stanley Capital International (MSCI) has temporarily frozen Indonesia’s February market status review and warned of a potential downgrade from Emerging Market to Frontier Market, citing persistent structural and governance weaknesses in the equity market. Key concerns include opaque ownership structures, limited disclosure of ultimate beneficial owners, and significant price distortions in several heavily weighted stocks, particularly conglomerate- and state-owned enterprise-linked names, which have pushed the Jakarta Composite Index (JCI) higher without corresponding improvements in fundamentals.
MSCI has also pointed to weak enforcement against market manipulation and coordinated price formation, which it views as undermining market integrity and investability.
The announcement immediately rattled markets. After MSCI froze rebalancing due to investability concerns, the JCI plunged 7.35 percent to close at 8,320.56 on Jan. 28, falling well below the 8,880–8,780 support range ahead of the market open. In response, the Indonesia Stock Exchange (IDX) and the Financial Services Authority (OJK) stressed their ongoing coordination with MSCI, highlighting steps to improve transparency, including the publication of more comprehensive free-float data and continued engagement to address MSCI’s feedback rather than dismiss it.
Concerns over price manipulation are not new to policymakers. In October 2025, Finance Minister Purbaya Yudhi Sadewa announced that the government was intensifying efforts to crack down on and prosecute individuals involved in market manipulation, commonly referred to as “pump-and-dump” schemes. At the time, the IDX requested fiscal incentives to support the market, but Purbaya declined to grant them immediately, arguing that incentives should only follow a cleanup of manipulative practices to ensure adequate protection for retail investors.
The stakes are high. MSCI is a global index provider whose country classifications, developed, emerging, or frontier, serve as benchmarks for trillions of dollars in active and passive investment funds worldwide. Indonesia’s inclusion in the MSCI Emerging Markets Index determines its eligibility for investment by a large pool of institutional investors whose mandates are strictly tied to that classification.
The MSCI episode has, unsurprisingly, intensified a growing perception among market participants that Indonesia’s financial watchdog has failed to keep pace with the mounting structural risks in the equity market. For years, foreign investors have raised concerns over selective enforcement, tolerance of extreme price movements in illiquid stocks, and the absence of credible deterrents against coordinated trading and insider-driven speculation.
MSCI’s explicit reference to weak enforcement and price distortions has now effectively elevated these critiques to the international stage, lending them far greater weight than domestic complaints from analysts or minority shareholders.
These concerns have been further amplified by the recent decision of OJK chief commissioner Mahendra Siregar to step down, with rumors from investors circulating that Mahendra had not been prepared to manage the capital market.
