Indonesia Market Outlook

Indonesia is the largest economy in Southeast Asia with the world’s fourth largest population, of which half are younger than 30. Indonesia was Western Australia’s 11th largest trading partner in 2022, with $4.6 billion worth of goods traded. The country is Western Australia’s 8th largest merchandise export market, with Western Australian exports accounting for 30 per cent of Australia’s merchandise exports to Indonesia in 2022.

The relationship between the two countries is also supported by the Western AustraliaEast Java sister-state relationship and Western Australia’s collaboration with the Singharasi Special Economic Zone in East Java.

Indonesia is a key market under Western Australia’s Asian Engagement Strategy 2019-2030, which supports:

• maximising trade and investment opportunities

• Asia literacy and capability

• people-to-people links

• business networks and communities.

On 5 July 2022, Australia and Indonesia entered into the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA). Building on the ASEAN-Australia-New Zealand Free Trade Agreement, the IA-CEPA provides improved access to the Indonesia market for Australian exporters, enabling new opportunities for Western Australian businesses.

The urbanisation of Indonesia’s thriving consumer class is generating unprecedented levels of demand for discretionary products and services including education, tourism, digital technology, and premium food and beverages. With efficient shipping routes, direct flights and the same operational time zone, Western Australia’s world-renowned export industries are well placed to respond to the growing demand for goods and services in Indonesia.

Despite the current challenges facing the international market, Indonesia has recovered strongly from the instability created by the COVID-19 pandemic and subsequent supply chain disruptions. In 2022, the Indonesian economy grew by 5.3 per cent driven by strong levels of domestic consumer confidence.