Vulnerable to global trade tensions


LOW RISK for entreprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

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GDP USD1015.539bn (World ranking 16, World Bank 2017)
Population 263.99mn (World ranking 4, World Bank 2017)
Form of state Republic
Head of government Joko WIDODO (President)
Next elections 2019, presidential and legislative
  • Abundant natural resources (coal, petroleum, and copper ore along with agriculture)
  • Resilient banking system owing to relatively high capital adequacy ratio and low level of NPLs
  • Favorable demographics: large and young population as well as growing middle class
  • Solid public finances and sound fiscal policies
  • Weak legal system
  • Inefficient tax administration and strong informal economy
  • Growth dependent on raw commodity exports, especially to the slowing Chinese economy
  • Serious infrastructure gap compared to regional peers
  • Increasing inequality poses a threat to social cohesion and inclusive economic growth
  • Low levels of educational spending

Trade structure by destination/origin

(% of total)

Exports Rank Imports
China 12%
23% China
United States 11%
15% Singapore
Japan 11%
9% Japan
Singapore 8%
6% Thailand
India 7%
5% Malaysia

Trade structure by product

(% of total)

Exports Rank Imports
Fixed vegetable oils and fats, crude, refined or fractionated 12%
13% Petroleum, petroleum products and related materials
Coal, coke and briquettes 10%
6% Electrical machinery, apparatus and appliances, n.e.s.
Articles of apparel & clothing accessories 5%
6% Other industrial machinery and parts
Gas, natural and manufactured 5%
5% Iron and steel
Miscellaneous manufactured articles, n.e.s. 4%
5% Telecommunication and sound recording apparatus
Payment terms in Indonesia are around 30 days on average. However, the payment behaviour of Indonesian companies has deteriorated in recent years. Domestic law regulates the issue of late payment.​

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings

Legal action in Indonesia is usually lengthy and costly while the appeal process provides debtors with an opportunity to further delay the proceedings; therefore conducting orchestrated debt collection efforts is the best option.

The insolvency framework has improved over recent years, so the amount of inconsistent decisions which used to be rendered has been reduced, but in practice the insolvency system is still to be tested.


Euler Hermes

Economic Research Team

Mahamoud Islam

Senior Economist for Asia