Editing Economy of Indonesia (section)

===Reform era===
Since an inflation target was introduced in 2000, the GDP deflator and the [[Consumer price index|CPI]] have grown at an average annual pace of 10¾% and 9%, respectively, similar to the pace recorded in the two decades prior to the 1997 crisis, but well below the pace in the 1960s and 1970s.<ref>{{cite web|url= https://socialhistory.org/sites/default/files/docs/ecgrowtheng.pdf |title=Indonesia's growth experience in the 20th century: Evidence, queries, guesses|author=van der Eng, Pierre |publisher=Australian National University|date=4 February 2002 |access-date=10 October 2017|archive-url=https://web.archive.org/web/20171010152026/https://socialhistory.org/sites/default/files/docs/ecgrowtheng.pdf |archive-date=10 October 2017|url-status=dead}}</ref> Inflation has also generally trended lower through the 2000s, with some of the fluctuations in inflation reflecting government policy initiatives such as the changes in fiscal subsidies in 2005 and 2008, which caused large temporary spikes in CPI growth.<ref name="efm.bris.ac.uk">{{cite web|url=http://www.efm.bris.ac.uk/economics/working_papers/pdffiles/dp01522.pdf|title=Growing into trouble: Indonesia after 1966 |author=Temple, Jonathan|publisher=University of Bristol|date=15 August 2001|access-date=27 December 2016|url-status=dead|archive-url=https://web.archive.org/web/20161227202512/http://www.efm.bris.ac.uk/economics/working_papers/pdffiles/dp01522.pdf |archive-date=27 December 2016}}</ref>

[[File:Historical gdp per capita of indonesia.png|thumb|left |Historical GDP per capita development of Indonesia]]
{|class="wikitable floatright"
! style="text-align:center; background:#cfb;" colspan="2"|Share of world GDP (PPP)<ref name="2025/04">{{cite web |title=Report for Selected Countries and Subjects |url=https://www.imf.org/en/Publications/WEO/weo-database/2025/April/weo-report?c=536,&s=NGDP_RPCH,NGDPD,NGDPDPC,PPPPC,PPPSH,PCPIPCH,GGXWDN_NGDP,BCA_NGDPD,&sy=1980&ey=2030&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1 |website=IMF.org |publisher=International Monetary Fund |access-date=6 May 2025}}</ref>
|-
! style="background:#cfb;"|Year
! style="background:#cfb;"|Share
|-
|style="text-align:left;"|1980||style="text-align:right;"|1.24%
|-
|style="text-align:left;"|1990||style="text-align:right;"|1.68%
|-
|2000
|style="text-align:right;"|1.7%
|-
|2010
|style="text-align:right;"|2.07%
|-
|2020
|style="text-align:right;"|2.31%
|-
|2025
|style="text-align:right;"|2.42%
|}

In late 2004, Indonesia faced a 'mini-crisis' due to [[World oil market chronology from 2003|international oil prices rises]] and imports. The currency exchange rate reached Rp 12,000/USD1 before stabilizing. Under President [[Susilo Bambang Yudhoyono]] (SBY), the government was forced to cut its massive fuel subsidies, which were planned to cost $14 billion in October 2005.<ref>{{cite news|last=BBC News|title=Indonesia plans to slash fuel aid|publisher=BBC, London|date=31 August 2005|url=https://news.bbc.co.uk/2/hi/business/4200100.stm }}</ref>

As of February 2007, the unemployment rate was 9.75%.<ref>{{cite press release|publisher=Indonesian Central Statistics Bureau |title=Beberapa Indikator Penting Mengenai Indonesia|date=2 December 2008|url=http://www.bps.go.id/leaflet/leaflet-desember-07-ind.pdf |language=id|access-date=18 March 2008|url-status=dead|archive-url=https://web.archive.org/web/20080401200753/http://www.bps.go.id/leaflet/leaflet-desember-07-ind.pdf |archive-date=1 April 2008 }}</ref> Despite a slowing global economy, Indonesia's economic growth accelerated to a ten-year high of 6.3% in 2007. This growth rate was sufficient to reduce poverty from 17.8% to 16.6% based on the government's poverty line and reversed the recent trend towards [[jobless recovery|jobless growth]], with unemployment falling to 8.46% in February 2008.<ref>{{cite press release|title=Indonesia: Economic and Social update|publisher=[[World Bank]]|year=2008|access-date=2 April 2008|url=http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2008/06/19/000333037_20080619004758/Rendered/PDF/442730WP0BOX321ate1apr200801PUBLIC1.pdf|url-status=dead|archive-url=https://web.archive.org/web/20110607014451/http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2008/06/19/000333037_20080619004758/Rendered/PDF/442730WP0BOX321ate1apr200801PUBLIC1.pdf|archive-date=7 June 2011}}</ref><ref>{{cite press release|title=Indonesia: BPS-STATISTICS INDONESIA STRATEGIC DATA|publisher=BPS-Statistic Indonesia|year=2009 |url=http://www.bps.go.id/eng/download_file/data_strategis.pdf |access-date=5 November 2008|url-status=dead|archive-url=https://web.archive.org/web/20101113161704/http://www.bps.go.id/eng/download_file/data_strategis.pdf|archive-date=13 November 2010}}</ref> Unlike many of its more export-dependent neighbors, Indonesia has managed to skirt the recession helped by strong domestic demand (which makes up about two-thirds of the economy) and a government fiscal stimulus package of about 1.4% of GDP. After India and China, Indonesia was the third-fastest growing economy in the G20. With the $512 billion economy expanded 4.4% in the first quarter from a year earlier and last month, the IMF revised its 2009 Indonesia forecast to 3–4% from 2.5%. Indonesia enjoyed stronger fundamentals with the authorities implemented wide-ranging economic and financial reforms, including a rapid reduction in public and external debt, strengthening of corporate and banking sector balance sheets and reducing bank vulnerabilities through higher capitalization and better supervision.<ref>{{cite web |url=http://www.imf.org/external/pubs/ft/survey/so/2009/car072809b.htm|title=IMF Survey: Indonesia's Choice of Policy Mix Critical to Ongoing Growth|publisher=Imf.org|date=28 July 2009|access-date=29 August 2011}}</ref>

In 2012, Indonesia's real GDP growth reached 6%, then it steadily decreased below 5% until 2015. After Joko Widodo succeeded SBY, the government took measures to ease regulations for foreign direct investments to stimulate the economy.<ref>{{Cite magazine |url=https://time.com/4416354/indonesia-joko-jokowi-widodo-terrorism-lgbt-economy/|title=Indonesian President Joko 'Jokowi' Widodo Two Years On|magazine=Time|access-date=2018-05-07}}</ref> Indonesia managed to increase their GDP growth slightly above 5% in 2016–2017.<ref>{{Cite news |url=https://www.bloomberg.com/news/articles/2017-12-27/jokowi-heads-to-2018-with-backing-of-stronger-indonesian-economy|title=Jokowi Heads to 2018 With Backing of Stronger Indonesian Economy|work=Bloomberg.com|access-date=2018-05-07}}</ref> However, the government is currently still facing problems such as currency weakening, decreasing exports and stagnating consumer spending.<ref>{{Cite news |url=https://www.bloomberg.com/news/articles/2018-05-07/indonesia-s-economy-expands-at-slower-pace-than-forecast|title=Indonesian GDP Growth Disappoints, Adding to Currency Woes |work=Bloomberg.com|access-date=2018-05-07}}</ref><ref>{{Cite web |url=https://asia.nikkei.com/Economy/Indonesian-GDP-growth-falls-short-in-1Q-pressuring-President-Widodo|title=Indonesian GDP growth falls short in 1Q, pressuring President Widodo |website=Nikkei Asian Review-GB|access-date=2018-05-07}}</ref> The current unemployment rate for 2019 is at 5.3%.<ref>{{Cite web |title=World Economic Outlook (April 2020) - Unemployment rate |url=https://www.imf.org/external/datamapper/LUR@WEO/IDN?zoom=IDN&highlight=IDN|access-date=2020-07-04|website=www.imf.org}}</ref>

Between 2019 and 2020, Indonesia's economy faced significant challenges due to the [[COVID-19 pandemic]]. The country's GDP contracted by 2.1% in 2020, marking its first annual decline in over two decades.<ref name=":0" /> This downturn was attributed to strict public health measures, including [[Indonesia large-scale social restrictions|large-scale social restrictions (PSBB)]], which disrupted economic activities, particularly in major urban centers like Jakarta and [[West Java]].<ref>{{Cite journal |last=Wuryandani |first=Dewi |date=August 2020 |title=THE COVID-2019's IMPACT ON INDONESIA ECONOMIC GROWTH 2020 AND THE SOLUTION |url=https://berkas.dpr.go.id/pusaka/files/info_singkat/Info%20Singkat-XII-15-I-P3DI-Agustus-2020-206-EN.pdf |journal=INFO Singkat}}</ref> Despite these challenges, the government implemented fiscal stimulus packages and social assistance programs to mitigate the pandemic's impact on vulnerable populations. By the third quarter of 2020, signs of recovery emerged, with the pace of economic contraction slowing to 3.5% year-over-year, driven by a partial rebound in consumption and investment.<ref>{{Cite web |title=Indonesia Economic Prospects, December 2020: Towards a Secure and Fast Recovery |url=https://www.worldbank.org/en/country/indonesia/publication/december-2020-indonesia-economic-prospects |access-date=2025-06-06 |website=World Bank |language=en}}</ref>

In 2021, Indonesia's economy began to recover, recording a growth rate of 4.4%, supported by improved domestic demand and positive spillovers from a stronger global economy.<ref name=":1">{{Cite web |title=Indonesia Economic Prospects (IEP), June 2021: Boosting the recovery |url=https://www.worldbank.org/en/country/indonesia/publication/indonesia-economic-prospects-iep-june-2021-boosting-the-recovery |access-date=2025-06-06 |website=World Bank |language=en}}</ref> The recovery was further bolstered by the government's efforts to accelerate the [[COVID-19 vaccine|COVID-19 vaccination]] rollout and implement policies aimed at boosting economic activity. Growth accelerated to 5.0% in 2022, driven by reduced uncertainty and the assumption that the vaccine rollout would reach a critical mass of the population.<ref name=":1" />

In October 2024, [[Prabowo Subianto]] assumed the presidency, inheriting an economy with steady growth but facing structural challenges.<ref>{{Cite magazine |last=Indonesia |first=Charlie Campbell / Jakarta |date=2024-10-14 |title=How Prabowo Subianto Steers Indonesia's Future |url=https://time.com/7022858/prabowo-subianto-indonesia-jokowi/ |access-date=2025-06-06 |magazine=TIME |language=en}}</ref> His administration introduced ambitious policies aimed at boosting economic growth to 8%, including a $28 billion annual free school meals program and plans to retire all fossil fuel power plants within 15 years.<ref>{{Cite web |last=antaranews.com |date=2025-01-22 |title=Free meals to boost children's academic abilities: Prabowo |url=https://en.antaranews.com/news/342382/free-meals-to-boost-childrens-academic-abilities-prabowo |access-date=2025-06-06 |website=Antara News |language=en}}</ref><ref>{{Cite web |title=Govt sticks to 'unrealistic' 8% GDP growth target - Economy |url=https://www.thejakartapost.com/business/2025/05/21/govt-sticks-to-unrealistic-8-gdp-growth-target.html |access-date=2025-06-06 |website=The Jakarta Post |language=en}}</ref><ref>{{Cite web |last=Thomasson |first=Emma |date=2025-05-13 |title=Indonesia sends mixed messages on coal phaseout |url=https://greencentralbanking.com/2025/05/13/indonesia-sends-mixed-messages-on-coal-phaseout/ |access-date=2025-06-06 |website=Green Central Banking |language=en-GB}}</ref> To fund these initiatives, the government implemented significant budget cuts totaling $18.8 billion,<ref>{{Cite web |last=antaranews.com |date=2025-02-14 |title=Prabowo's budget cut paradox: Balancing austerity with bloated cabinet |url=https://en.antaranews.com/news/344893/prabowos-budget-cut-paradox-balancing-austerity-with-bloated-cabinet |access-date=2025-06-06 |website=Antara News |language=en}}</ref> affecting various sectors such as public works, education, and health.<ref>{{Cite news |last1=Mariska |first1=Diana |last2=Lakshmi |first2=A. Anantha |date=2025-02-11 |title=Indonesia's $19bn austerity drive targets travel and air conditioning |url=https://www.ft.com/content/38d4d464-f3d7-4815-bd28-439b1eadbc20 |access-date=2025-06-06 |work=Financial Times}}</ref> These austerity measures led to public unrest and raised concerns about the potential impact on infrastructure projects and public services.<ref>{{Cite web |date=2025-02-26 |title='Dark Indonesia' protests mark first major test of Prabowo's leadership |url=https://www.scmp.com/week-asia/politics/article/3300172/will-dark-indonesia-protests-against-prabowos-austerity-cuts-escalate-further |access-date=2025-06-06 |website=South China Morning Post |language=en}}</ref> Additionally, the presence of entrenched criminal networks, known as ''[[Preman (Indonesian gangster)|preman]]'', along with certain mass organizations (ormas), posed significant challenges to foreign investment and economic reforms. These groups have been involved in activities such as extortion, intimidation, and obstruction of industrial operations, particularly in key economic zones like [[Bekasi]], [[Karawang]], and [[Batam]]. Such actions have led to financial losses estimated up to $137.8 billion<ref name=":2">{{Cite news |date=29 April 2025 |title=Ancaman Rugi Rp2.200 T-Marak Preman di Dunia Bisnis RI, Salah Siapa? |url=https://www.cnnindonesia.com/ekonomi/20250429061830-92-1223689/ancaman-rugi-rp2200-t-marak-preman-di-dunia-bisnis-ri-salah-siapa |access-date=6 June 2025 |work=CNN Indonesia |language=Indonesian}}</ref> and have deterred potential investors, undermining efforts to create a conducive investment climate.<ref>{{Cite web |last=Bhwana |first=Petir Garda |date=2025-05-15 |title=A Series of Cases of Extortion by Mass Organizations to Companies |url=https://en.tempo.co/read/2007369/a-series-of-cases-of-extortion-by-mass-organizations-to-companies |access-date=2025-06-06 |website=Tempo |language=en}}</ref><ref>{{Cite web |last=melati.mewangi@kompas.com |first=Melati Mewangi- |date=2025-03-20 |title=Questioning the Rise of Mass Organizations in Indonesia (14) |url=https://www.kompas.id/artikel/en-mempertanyakan-hadirnya-ormas-di-indonesia |access-date=2025-06-06 |website=Kompas.id |language=id}}</ref><ref name=":2" />

Between 2019 and 2025, the IDR experienced significant fluctuations influenced by both domestic and global factors.<ref>{{Cite news |last=Vora |first=Nimesh |date=2025-06-02 |title=Weak dollar reprises its role as 'carry' trade funder |url=https://www.reuters.com/world/americas/global-markets-carrytrades-pix-2025-06-02/ |access-date=2025-06-06 |work=Reuters |language=en}}</ref> In 2020, during the COVID-19 pandemic, the rupiah weakened sharply, reaching around Rp 16,500 per US dollar due to capital outflows and [[2020 stock market crash|economic crash]]. As the economy began to recover in 2021 and 2022, the currency stabilized, trading between Rp 14,000 and Rp 15,000 per dollar. However, in 2023 and 2024, the rupiah faced renewed pressure, depreciating to levels around Rp 16,200 per dollar by April 2024. This depreciation was attributed to political uncertainties ahead of the presidential election and concerns over fiscal policies.<ref>{{Cite web |last=Porajow |first=Agustinus Allan |date=2024-05-15 |title=Rupiah's Depreciation Reflects Economic Uncertainty in Indonesia |url=https://moderndiplomacy.eu/2024/05/15/rupiahs-depreciation-reflects-economic-uncertainty-in-indonesia/ |access-date=2025-06-06 |website=Modern Diplomacy |language=en-US}}</ref>

In 2025, the rupiah's performance remained volatile. Early in the year, it reached a five-year low, prompting Bank Indonesia to intervene in the foreign exchange market to stabilize the currency. The central bank maintained its benchmark interest rate at 5.75% in March to support the rupiah and control inflation.<ref>{{Cite news |last1=Mariska |first1=Diana |last2=Lakshmi |first2=A. Anantha |date=2025-03-19 |title=Indonesia shores up rupiah as fears over sluggish economy mount |url=https://www.ft.com/content/b6f4ce79-ccc3-4b00-821f-234a5fcb63e1 |access-date=2025-06-06 |work=Financial Times}}</ref> By May, with signs of stabilization, Bank Indonesia cut the rate to 5.50% to stimulate economic growth, as the rupiah had appreciated over 3% from its April lows.<ref>{{Cite news |last=Trivedi |first=Rahul |date=2025-05-20 |title=POLL Bank Indonesia to cut rates on May 21 as rupiah stabilises |url=https://www.reuters.com/world/asia-pacific/bank-indonesia-cut-rates-may-21-rupiah-stabilises-2025-05-19/ |access-date=2025-06-06 |work=Reuters |language=en}}</ref>