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
The plan to merge national flag carrier PT Garuda Indonesia with PT Pelita Air Service, a subsidiary of energy holding state-owned enterprise (SOE) PT Pertamina, has reached a new stage. State asset fund Danantara has brought Garuda and Pertamina together to assess share structures and other corporate aspects. The move aligns with broader efforts to streamline SOEs. However, critics argue that the merger primarily serves as an effort to rescue the financially distressed Garuda.
Danantara stated that the proposed merger aims to reduce market cannibalization between the airlines while advancing its mandate to streamline and consolidate SOEs. Under this plan, the airlines would operate with clearer segmentation while sharing best practices. Danantara targets a reduction of holding SOEs to one per industry, and a cut in the overall SOE ecosystem from roughly 1,000 companies to 200.
The Garuda and Pelita merger was first proposed by the former SOEs Ministry, now the SOEs Regulatory Agency, in 2023 while Garuda was on the brink of bankruptcy with Rp 142 trillion (US$8.5 billion) in debt. At the time, Garuda, Pelita and Garuda's subsidiary PT Citilink Indonesia were envisioned to serve the full-service carrier (FSC), "medium-to-premium" carrier, and low-cost carrier (LCC) market segments, respectively, under a holding company.
A House of Representatives Commission VI member opposed the merger, citing risks to Pelita Air's management quality and corporate culture. Several experts have argued that consolidation alone will not solve Garuda's problems. Garuda posted US$142.8 million in losses in the first half of 2025. Pelita, while recording US$5.9 million of profit in 2024, only had US$101.5 million in assets. It also had Rp 519 billion in equity and Rp 1.1 trillion in liabilities.
Indonesia's high import duties on aircraft spare parts at 37.9 percent drove maintenance expenses from 13 percent of Garuda’s operating expenses in the first quarter (Q1) 2023 to 21.7 percent in Q1 2025. Suppliers also require upfront payments due to Garuda’s financial state, tightening cash flow and forcing the temporary grounding of 15 Citilink aircraft.
By the third quarter of 2025, Garuda's net loss widened to US$182.53 million, with liabilities reaching US$8.28 billion. In response, shareholders approved the issuance of 315.6 billion series D shares at Rp 75 per share, raising Rp 23.67 trillion consisting of Rp 17.02 trillion in capital deposits and Rp 6.65 trillion in shareholder loan conversions. Garuda allocated Rp 14.9 trillion to support Citilink's operations and help repay its Rp 3.7 trillion jet fuel debt to Pertamina, while Rp 8.7 trillion will fund Garuda's working capital and maintenance.
Danantara aims to restore Garuda to profitability by 2026 through four key pillars. First, financial overhaul, including the planned transfer of airport SOE Injourney Airports' land assets to Garuda's maintenance unit GMF AeroAsia. Second, service transformation across all customer touchpoints. Third, business transformation by prioritizing strategic and profitable routes. Fourth, operational and technological improvements to raise efficiency and performance. A key component of this turnaround is the reactivation of Garuda's grounded aircrafts. They continue to incur maintenance costs while generating no revenue, worsening Garuda's financial pressures.
However, political dynamics may pose new issues. Gen. (ret) Glenny H. Kairupan was recently appointed as CEO of Garuda as Prabowo reportedly looked for someone he personally trusted to resolve his dissatisfactions with the airline. Glenny, who has been in Prabowo's circle since their military cadet days and a member of the ruling Gerindra Party's board of trustees for 2020–2025, has no experience in both managing large corporations and working in the aviation industry.
To address concerns about management quality and preserve Pelita’s good performance, the merger should result in a holding company that allows each carrier to maintain its culture and operational identity. Cargo services could be consolidated into a separate unit. Segmentation should extend beyond service standards under Law No. 1/2009 on Aviation to align with national priorities by distinguishing airlines serving major international and domestic routes from those serving secondary cities and underserved areas.
