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

November 6, 2026

Indonesia is facing mounting economic and diplomatic costs from forest and peatland fires this year as a prolonged dry season coincides with a strong El Niño and a positive Indian Ocean Dipole (IOD). The fires have caused widespread damage, placed a substantial burden on public health and economic activity and sent haze across national borders. The combined economic and health costs are estimated to have reached as much as Rp 123.1 trillion (US$6.79 billion), while the resulting pollution has strained relations with neighboring countries.

According to a study by CELIOS, economic losses from the fires in January-August 2026 are estimated to range between Rp 39.29 trillion and Rp 123.1 trillion. The upper-end figure is equivalent to 49.1 percent of the projected gross regional domestic product (GRDP) of Central Kalimantan this year, illustrating the scale of the potential damage and the economic stakes of avoiding seasonal fires from becoming an annual crisis.

The lower-end estimate comprises Rp 29.54 trillion in damage to physical assets and disruption to economic activities as well as Rp 9.75 trillion in healthcare costs. The final figure could be much higher if the fires continue to the year-end. Meanwhile, potential losses in local tax revenue are estimated at Rp 269.86 billion.

The government has allocated approximately Rp 1.2 trillion in emergency assistance to manage the fires and address related impacts, which has been distributed in two phases to affected provinces and districts. The first funding phase, worth Rp 760 billion, was disbursed on Sept. 7, followed by a second disbursement of around Rp 475 billion on Oct. 22.

The assistance is intended to support firefighting operations, evacuations, medical treatment for smoke-related illnesses, logistical supplies and postfire peatland restoration.

Industrial land clearing is a central cause of this year's fires, with environmental researchers pointing to deliberate burning for agriculture and plantations alongside decades of deforestation and peatland conversion.

Between January and July, 285,914 hectares of land burned nationwide, according to independent forest monitoring platform Nusantara Atlas. Around 23.9 percent of that area, or approximately 68,324 ha, fell within industrial concessions and includes 15,146 ha in oil palm concessions, 12,120 ha in mining concessions and 10,485 ha in pulpwood concessions.

Deliberate burning to clear land for agriculture and industry often allows fires to spiral out of control. The fires were further exacerbated by a prolonged dry season that left vegetation and peatlands unusually dry, which served as fuel for fires to spread beyond their initial land clearing sites.

Unlike surface fires, peat fires can persist below ground and reignite, requiring sustained efforts to extinguish them fully. Satellite monitoring revealed that in September, fires were burning both above and beneath the ground in peatlands, with underground fires likely to burn until sufficient rainfall returned to the country.

The fires have also become a source of diplomatic tension at a particularly sensitive time for regional cooperation, and ASEAN foreign ministers are expected to discuss transboundary haze ahead of the bloc’s annual summit in November. Smoke from the fires has spread from Indonesia into Singapore and Malaysia, exposing disagreements over the accountability of businesses operating across borders and the extent to which affected governments can intervene.

The dispute is particularly consequential for Singapore, given its close bilateral ties with Indonesia. The island country has been Indonesia's largest source of foreign investment since 2014, and its investments totaled Rp 230.46 trillion in the first nine months of this year alone.

Diplomatic friction intensified in October, when Singapore invoked its Transboundary Haze Pollution Act to hold accountable companies linked to the haze. Singapore issued preventive measure notices (PMNs) to Indonesian companies with concession areas linked to the fires, while separately requesting information from Singapore-registered businesses about corporate ties to Indonesian concession holders and their fire prevention efforts.

The two neighbors have since sought to prevent the dispute from escalating. On Oct. 27, Foreign Minister Arrmanatha Nasir and Singaporean Foreign Minister Vivian Balakrishnan met in Jakarta and agreed to establish a joint task force to share information, gather cross-border evidence and investigate companies linked to the fires. Nasir welcomed Singapore's offer to share corporate information and financial intelligence, while Balakrishnan said Singapore was prepared to pursue locally registered companies that were found responsible.

Indonesia’s recurring forest and peatland fires pose a threat not only to domestic economic activity and public health but also to its relationships with regional trading partners and investors. The substantial economic costs of the fires, combined with the risk of diplomatic friction over transboundary haze, demonstrate how environmental mismanagement can undermine investor confidence and complicate cross-border economic cooperation.

Although Indonesia’s wildfires have become a familiar feature during the dry season, their recurrence should not make them an accepted cost of doing business. Without sustained action to prevent deliberate burning to clear land, the damage risks compounding with each fire season.

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