Indonesia

HSBC Navigator provides comprehensive insight into the now, next and how for business, representing the views of over 9,100 business decision-makers across 35 markets. This report gives an understanding of how businesses like yours can continue to grow now and in the future.

An economy on the rise

Indonesia has been a fast-growing emerging economy for the last decade or so, with growth of around 5% every year since 2015. Next year is likely to see a similar story, as prudent macroeconomic policy continues to strengthen both domestic consumption and investment inflows1. Global headwinds may temper ambitions somewhat, but the immediate future looks bright. 

State of play

Overwhelming optimism

Indonesian businesses remain bullish about the future trade outlook. Companies are far more confident than their global or Asian counterparts, with more than half (54%) of Indonesian companies considered high-growth firms (meaning they expect sales to grow by 15% or more in the next year) and that confidence is growing. Nine in 10 (90%) firms are more optimistic about growth than they were a year ago.

The only countries that come close to that level of optimism are Bangladesh at 74% and India at 72%. Sustainability, the quality of suppliers and raw materials and skills in the workforce are all top drivers of this growth. Firms are also expanding, with opportunities in new markets and the introduction of new products and services identified as factors driving sales.

54 %

Indonesian companies are far more confident than their global or Asian counterparts, with more than half (54%) of Indonesian companies considered high-growth firms

Expectations for future business growth

Expect sales to grow – Next year*
99%
Expect sales to grow – Next five years*
100%
Grow by 15% or more – Next year
54%
Grow by 15% or more – Next five years
61%
Grow by 6-14% – Next year
36%
Grow by 6-14% – Next five years
33%

Next year

Grow by 5% or less

9%

Stay the same

1%

Expect sales to shrink

1%

Next five years

Grow by 5% or less

5%

Stay the same

0%

Expect sales to shrink

0%

*This is the sum of grow by 5% or less, 6-14%, 15% or more.

What you need to know

  1. 1

    54% of Indonesian firms are high-growth firms, expecting sales to grow 15% or more in the next year, and that figure climbs to 61% over five years.

  2. 2

    Key drivers of growth in Indonesia include, increased sustainability (cited by 45%, compared to 26% globally) and the quality and availability of suppliers and raw materials (43% versus 27%).

  3. 3

    Almost all businesses (97%) expect positive prospects for international trade and nearly half (45%) are feeling very positive.

What your business can do

  •  Consider how you can use digital technology. Nearly half of Indonesian firms expect to increase its use in their supply chains in the next three years.

  • Prepare for change. 60% of Indonesian companies expect their business to change substantially in the next five years, far ahead of the global average (35%).

  • Analyse your supply chain. 36% of businesses are doing business in new markets/locations.