Economy

Indonesia is the largest economy in Southeast Asia with an estimated GDP of US$ 528 billion. After several years of good commercial ties, the recent economic crisis caused a 31.7% drop in Austrian exports to Indonesia to € 156 million in 2009. The decline was strongest in the traditionally important machine trade. In the same period, Austrian imports fell by 11.2% to € 163 million, affecting the largest trade sectors electronics, textiles and shoes. However, a significant proportion of Austrian goods are imported to Indonesia via third countries (especially Singapore) and thus do not appear in bilateral external trade statistics.

Around 30 Austrian companies – mostly engaged in production, distribution and services – currently have offices in Indonesia. Some operate there via third-country subsidiaries. The largest Austrian firms are South Pacific Viscose (Lenzing), Andritz-Hydro und Waagner-Biro.

Indonesia has rich reserves of mineral raw materials such as natural gas, coal, oil, tin, nickel, bauxite and gold. Indonesian oil extraction has fallen since 1995 and in 2004 the country became a net-importer of oil, prompting it to suspend its OPEC membership. In addition, Indonesia has vast timber reserves and exports agricultural products such as natural rubber, vegetable oils, rice, sugar, cocoa, tea, coffee and tobacco. The labour-intensive textile and furniture industries are also important.

Several infrastructure investments were put on hold in the wake of the 1997 Asian Financial Crisis. However, a growing population and recent years’ positive economic growth have increased the need for a functioning infrastructure, especially with regard to energy, telecommunications, transport, water supply, and roads.

An extensive infrastructure programme worth US$ 140 billion may offer remedy. The programme, which aims to improve transportation as well as the energy and agriculture sectors by 2014, is expected to attract investors and companies to participate.

The Indonesian economy is coping well amid the recent financial crisis. This is largely due to strong domestic consumption, a government stimulus plan, and the economy being comparably weakly interlinked with foreign markets. In 2009, despite the noticeable drop in imports and exports, Indonesia’s economy grew by 4.6%.

Japan, Singapore, Europe, the United States, China, South Korea and Malaysia are Indonesia’s main trading partners. In recent years, Indonesian trade has undergone a shift, with imports from ASEAN countries and China now constituting a larger share than trade with traditional partners, especially Europe, but also Japan and the United States.

Indonesia’s economy is expected to grow by about 6,5% in 2012.