Indonesia Economic Update Report, Q4 2024

Indonesia’s Trade Performance in Q4 2024: Growth Sustains Amid Import Surge and Shifting Trade Balances

Indonesia’s trade performance in Q4 2024 remained strong, with total trade reaching $134.67 billion, reflecting an 8.69% year-on-year (YoY) increase. Exports stood at $71.88 billion (up 8.03% YoY), while imports rose 9.46% YoY to $62.79 billion. Although trade activity continued its upward trajectory, the trade surplus declined slightly by 0.88% YoY to $9.09 billion, primarily due to the faster growth in imports.

Non-oil and gas exports remained the dominant segment at $67.68 billion, while oil and gas exports contributed $4.2 billion. On the import side, non-oil and gas imports reached $53.26 billion, whereas oil and gas imports totaled $9.53 billion. The oil and gas trade deficit widened to -$5.33 billion, while the non-oil and gas trade surplus remained strong at $14.42 billion, underscoring Indonesia’s resilience in non-energy trade despite fluctuating commodity prices.

Indonesia’s export sector continued to benefit from strong global demand, with mineral fuels leading at $10.59 billion, though declining 1.91% YoY. Animal or vegetable fats and oils followed, increasing 19.24% YoY to $8.39 billion, while iron and steel remained stable at $7.01 billion, experiencing only a -0.02% YoY dip.

On the import side, machinery and mechanical appliances saw a 2.67% YoY rise to $8.80 billion, supporting industrial and infrastructure expansion. Electrical machinery and equipment imports surged 11.03% YoY to $7.10 billion, reflecting growing investments in electronics and manufacturing. Iron and steel imports grew 7.21% YoY to $2.91 billion, keeping pace with the increasing construction demand. The most significant increase came from precious metals and jewelry, which soared 97.50% YoY to $1.77 billion, driven by heightened gold bullion imports amid global uncertainties, while iron and steel articles climbed 50.49% YoY, reflecting shifts in supply chains and demand for specialized materials.

Indonesia’s trade remained heavily concentrated among its top partners, with China, ASEAN, and the United States accounting for 51.02% of total non-oil and gas trade. Detailed analysis of trade growth during 2024 with Indonesia’s main trading partners is as follows:

• China continued to be Indonesia’s largest trade partner, with total trade reaching $37.94 billion, representing a 13.39% YoY increase and accounting for 28.17% of Indonesia’s total trade value. Exports to China surged 26.12% YoY to $17.68 billion, while imports from China rose 38.04% YoY to $20.26 billion, highlighting an increasingly interdependent trade relationship.
• ASEAN followed as Indonesia’s second-largest trade bloc, with total trade reaching $21.38 billion, or 15.87% of total trade, marking a 13.44% YoY growth. Exports to ASEAN rose 18.49% YoY to $12.51 billion, while imports climbed 16.64% YoY to $8.86 billion, emphasizing deeper regional trade integration.
• The United States recorded the highest trade growth among major partners, with total trade increasing 17.85% YoY to $9.40 billion, accounting for 6.98% of Indonesia’s total trade value. Exports to the U.S. reached $7.15 billion, reflecting a 10.56% YoY increase, while imports grew 4.23% YoY to $2.25 billion.

Indonesia’s total trade for 2024 reached $498.36 billion, a 3.68% YoY increase. Exports grew 2.28% YoY to $264.70 billion, led by non-oil and gas exports at $248.83 billion, while oil and gas exports stood at $15.88 billion. Imports saw a 5.31% YoY increase to $233.66 billion, with oil and gas imports at $36.28 billion and non-oil and gas imports at $197.38 billion. The trade surplus stood at $31.04 billion, marking a 15.89% YoY decline, primarily due to the widening oil and gas trade deficit (-$20.40 billion).

Despite these challenges, Indonesia’s trade performance remains resilient, driven by strong regional partnerships and demand for non-oil and gas exports. With global economic shifts and rising industrial activity, Indonesia’s trade is expected to continue its upward trajectory into 2025, supported by manufacturing expansion, infrastructure investment, and policy measures to boost exports.

Launching $900 Billion Danantara Sovereign Wealth Fund, Indonesia Will Take Full Control of Its Resources with Strategic Foresight

With over $900 billion in assets under management, Indonesia’s newly launched Danantara Sovereign Wealth Fund aims to consolidate state-owned enterprises, attract global investment, and support President Prabowo’s ambitious 8% GDP growth target.

Indonesia has taken a bold step in its economic strategy with the launch of the Danantara Sovereign Wealth Fund. Officially inaugurated on February 24, 2025, Danantara aims to consolidate state-owned enterprises (SOEs), optimize investments, and accelerate economic growth. With over $900 billion in assets under management, the fund is positioned among the world’s largest sovereign wealth funds, aligning with President Prabowo Subianto’s goal of achieving 8% GDP growth by 2029. However, challenges such as fiscal constraints and structural inefficiencies remain.

Danantara, short for Daya Anagata Nusantara (“Future Power of the Archipelago”), has direct authority over SOEs, including capital allocation, restructuring, and mergers. Unlike its predecessor, the Indonesia Investment Authority (INA), which focuses on asset management and co-investments, Danantara aims to enhance SOE efficiency and profitability. The fund operates under three key bodies: a Supervisory Board, chaired by the Minister of SOEs; a Managing Board handling daily operations; and an Advisory Board offering strategic direction.

The fund’s initial $20 billion allocation will finance 20 high-impact projects in sectors such as downstream mineral processing, artificial intelligence, oil refineries, petrochemicals, food production, aquaculture, and renewable energy. Initially focused on domestic investments, Danantara plans to expand internationally in later phases, leveraging private equity and debt markets.

Danantara is expected to play a pivotal role in achieving Indonesia’s 8% growth target by enhancing SOE efficiency, attracting foreign investments, supporting infrastructure development, and fostering industrial growth. The fund aims to optimize state assets, reduce inefficiencies, and create high-value jobs. Through public-private partnerships and structured investment models, it seeks to attract global investors, particularly from the U.S., Middle East, and North Asia.

Despite its ambitious goals, Danantara faces hurdles. Fiscal constraints limit government spending, and the fund must carefully manage its cost of capital to maintain financial sustainability. External risks, such as global economic fluctuations and Indonesia’s reliance on commodity exports, could impact performance. Additionally, effective execution of SOE reforms and avoiding political interference will be critical to success.

Danantara represents a transformative step in Indonesia’s economic future. If managed effectively, it could be instrumental in realizing the country’s growth ambitions, attracting global capital, and solidifying Indonesia’s position as an emerging economic powerhouse. However, its long-term success will depend on sound governance, investment discipline, and the ability to navigate economic challenges.​

About this report

This report was compiled with contributions from the team of business experts across Alarar Capital Group’s global offices.

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