Indonesian President Prabowo Subianto has an ambitious economic goal for Indonesia, the largest economy in Southeast Asia, to hit 8% annual economic growth by 2029.
To achieve this, the Indonesian Government is prioritising increased investment, expanded exports, and a continuation of the “downstreaming” policy implemented during the previous Jokowi Administration.
The Government is confident it can reach its goals but there are obstacles standing in the way, not least of which is the decrease in the size of Indonesia’s middle class - from just under 60 million people in 2019 to approximately 48 million in 2024.
This decline is accompanied by sluggish real wage growth, which currently stands at only 1.46%. While the statistics for the proportion of people living in poverty and the “aspiring middle class” have improved somewhat, overall consumer confidence is weak.
Given that the middle class is traditionally the primary driver of domestic consumption In Indonesia, this contraction presents a significant hurdle for achieving sustainable economic growth.
The large informal sector in Indonesia remains a critical challenge to productivity.
Approximately 60% of the workforce is employed in the informal economy, which often operates outside of regulatory frameworks and provides fewer opportunities for skills development and innovation, limiting the potential for improving labour productivity which remains well below that of regional peers Thailand and Malaysia.
Pres Prabowo (with peci) has big plans for the Indonesian economy / Image Indo Min of Info
Indonesia’s low Human Development Index (HDI) also highlights the gap in human capital development. The country sits behind other ASEAN nations and the global average in some key indicators such as education and healthcare. Many Indonesians still do not finish secondary education, and student success suffers from underqualified teachers, out-moded learning methods, and an uneven quality between urban and rural schools – especially in the eastern provinces of the country.
There is also a continuing decline in the contribution of manufacturing to GDP, falling from 22% in 2010 to 17.2% in 2024, while the industrial sector's contribution to GDP peaked in 2001 at 29% and has steadily declined since then.
Indonesia remains heavily reliant on the export of commodities, with coal and palm oil accounting for around 25% of total export receipts. While the government is pushing for more downstream processing and value-added exports, this dependence on raw materials creates vulnerability to commodity price fluctuations.
The country has also suffered from the slowdown in China, and is likely to be impacted by new tariffs coming out of Washington in the next few days.
President Prabowo has already made several large moves that his Government hopes will turbo charge Indonesia’s economy.
To facilitate greater investment, President Prabowo has launched “Danantara”,(The Daya Anagata Nusantara), a state-owned investment company that aims to pool all the 47 State-Owned Enterprises under one administrative system, and channel SOE dividends along with additional funding into investments.
With an initial fund of US$20 billion, Danantara is touted as a transformative step, focused on high-impact, long-term projects.
The government plans to develop 100 gigawatts (GW) of renewable energy capacity by 2040, with an estimated investment of $235 billion. / Image Indonesian govt
Danantara plans to implement 10 to 15 major projects that will see an increase of 2-3% in GDP. Among these, the government is seeking investment to build three million houses annually over the next five years to address a significant shortfall in housing.
Prabowo’s Administration is also going full steam ahead with the previous Jokowi Administration’s “downstreaming” programme. This seeks to add value to Indonesia’s natural resources rather than simply exporting raw materials.
This approach has already been successful in nickel production where Indonesia is a global leader and holds the lion’s share of the world’s reserves.
The government aims to expand this model to bauxite, copper, and other minerals. However, it is not clear how effective this model will be with these more common commodities.
Meanwhile, the Government’s flagship, Free Nutritious Meals programme, is seen as a way to support the people, improving nutrition while also boosting economic growth.
At full scale, this programme will see 82.9 million school children, as well as pregnant mothers, provided with free meals.
President Prabowo also wants the programme to help boost Indonesian agricultural production and food security, including the dairy sector. It is, however, very costly.
The World Bank has said Indonesia needs to significantly increase tax revenues in order to invest more in human and physical capital to achieve its high-income status ambitions. Indonesia’s tax ratio currently sits at 10.2%, which the World Bank says is 6% less than its comparative peers.
The EIU expects the government's budget deficit to increase to 2.9% of GDP from 2.4% of GDP in 2025. Any mention of tax increases is met with strong public opposition.
Meanwhile, large cuts to government agency budgets have been undertaken to fund Danantara and the Free Nutritious Meals programme.
The World Bank, International Monetary Fund, and Asian Development Bank all estimate that Indonesia's economy will continue to grow within the range of 5-5.1% in 2025.
Meanwhile, a recent report by the U.S. Chamber of Commerce highlighted local content requirements (which led to the well-publicised temporary ban on sales of Apple’s IPhone 16 in Indonesia) as discouraging foreign companies from entering the market.
The path to 8% annual growth may present a number of challenges, but there continue to be significant opportunities for New Zealand.
Indonesia is projected to have the world’s seventh largest economy by 2030 and to be in the top five largest economies by 2050. For Kiwi businesses, a market of that size, potential and proximity to New Zealand, is a tantalising prospect.
There are also agreements in place to facilitate our trade. New Zealand and Indonesia are members of the AANZFTA agreement, which was upgraded in 2022 to further reduce trade barriers and boost trade within the region.
Both countries are also members of the Regional Comprehensive Economic Partnership, which also reduced tariff barriers for New Zealand exporters.
As NZTE notes, Indonesia is a market particularly suited for exporters with international experience and who are able to take a long term view.
While it might take time and patience, New Zealand brands with the right strategy and approach can succeed in this market and will reap the benefits as the very large number of Indonesian consumers continues to grow, and as Indonesia heads towards its vision of Golden Indonesia 2045.
Don't just visit Bali, experience it! This weekly “Bali Travel & Real Estate News” summary is your key to unlocking a richer, more informed journey.
Tune in each week and discover how to make the most of your time in paradise.
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This Weeks Bali News
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Australia-Bali Flight Services Resume After Volcanic Eruption Cancellations
Normal flight services have resumed at Bali’s I Gusti Ngurah Rai International Airport after six flights were delayed and seven more flights were canceled on Friday, 21st March 2025, due to the eruptions of Mount Lewotobi Laki-Laki on the island of Flores in East Nusa Tenggara.
Blog With Photos & Details Here__________________________
Foreigners Surprised to Receive Free Meal Service While Travelling on a Bus in Indonesia
Meal service on buses in Indonesia is a common facility provided to passengers during their journey. Typically, the cost of the meal is included in the ticket price, allowing passengers to enjoy a meal at a designated restaurant stop without needing to make an additional payment.
Blog With Photos & Details Here__________________________
Mike Tyson Explores Bali, Meditates, and Prepares to Open a Cafe In Bali
It has been widely circulated on social media that the iconic Mike Tyson is on holiday in Bali. The heavyweight boxing legend, who has a huge fanbase and a successful retirement, has been spotted collaborating with his friends somewhere on the Island of the Gods.
Blog With Photos & Details Here__________________________
Ogoh-Ogoh Festival in Bali 2025: A Cultural Parade of Art and Tradition
The Ogoh-Ogoh Festival in Bali is a lively and vibrant tradition that marks the island's spiritual preparations for Nyepi, the Day of Silence. In 2025, the Ogoh-Ogoh parade and competition took place in Badung Regency, attracting hundreds of locals and tourists alike.
Blog With Photos & Details Here__________________________
Bali Governor Issues Policy Updates Impacting International Tourists
Bali’s Governor, Wayan Koster, has signed off on policy changes and updates that will affect all international tourists from now on.
As Governor Koster starts his second term in office, he and his teams are eager to introduce legislation that will help improve the quality of the tourism sector across the island.
Blog With Photos & Details Here__________________________
Bali Plans To Bring An End To Illegal Tourist Accommodation
Leaders in Bali are speaking out about the impact that illegally operating tourist accommodation is having on the island.
From the potential dangers to tourists to the impact on the environment and the lasting effects on the local economy and communities, one Bali-based academic says enough is enough. Blog With Photos & Details Here__________________________
More Australia-Bali Flights To Be Added To Ngurah Rai Airport Schedule
New flight services have been added to the schedule at Bali’s I Gusti Ngurah Rai International Airport.
The new service will connect even more Australian tourists and holidaymakers with Bali, with more than 60 flights between the two destinations every day.
Blog With Photos & Details Here__________________________
Indonesian Immigration Office Confirms Closures Will Affect Bali Tourists
As Indonesia prepares to celebrate Eid al-Fitr, and as Bali is getting ready to also observe the holy day of Nyepi, tourists on the island are being reminded that business hours will be different for the coming week or so.
Blog With Photos & Details Here__________________________
Road Closures Will Affect Tourists In Bali This Week
As the island prepares for Nyepi, and as Indonesia prepares for the Eid al-Fitr festivities, there will be plenty more cars on the roads and new traffic systems in place to help keep everyone moving safely and easily.
Blog With Photos & Details Here__________________________
Tourist visa applications for summer 2025 travel surge by 68 %
MUMBAI: Tourist visa applications for summer 2025 have witnessed an unprecedented 68% increase compared to the previous year, according to recent data from visa processing platform Atlys.
Blog With Photos & Details Here__________________________
Australia-Bali Flight Services Resume After Volcanic Eruption Cancellations
Normal flight services have resumed at Bali’s I Gusti Ngurah Rai International Airport after six flights were delayed and seven more flights were canceled on Friday, 21st March 2025, due to the eruptions of Mount Lewotobi Laki-Laki on the island of Flores in East Nusa Tenggara.
Blog With Photos & Details Here
__________________________
Foreigners Surprised to Receive Free Meal Service While Travelling on a Bus in Indonesia
Meal service on buses in Indonesia is a common facility provided to passengers during their journey. Typically, the cost of the meal is included in the ticket price, allowing passengers to enjoy a meal at a designated restaurant stop without needing to make an additional payment.
Blog With Photos & Details Here
__________________________
Mike Tyson Explores Bali, Meditates, and Prepares to Open a Cafe In Bali
It has been widely circulated on social media that the iconic Mike Tyson is on holiday in Bali. The heavyweight boxing legend, who has a huge fanbase and a successful retirement, has been spotted collaborating with his friends somewhere on the Island of the Gods.
Blog With Photos & Details Here
__________________________
Ogoh-Ogoh Festival in Bali 2025: A Cultural Parade of Art and Tradition
The Ogoh-Ogoh Festival in Bali is a lively and vibrant tradition that marks the island's spiritual preparations for Nyepi, the Day of Silence. In 2025, the Ogoh-Ogoh parade and competition took place in Badung Regency, attracting hundreds of locals and tourists alike.
Blog With Photos & Details Here
__________________________
Bali Governor Issues Policy Updates Impacting International Tourists
Bali’s Governor, Wayan Koster, has signed off on policy changes and updates that will affect all international tourists from now on.
As Governor Koster starts his second term in office, he and his teams are eager to introduce legislation that will help improve the quality of the tourism sector across the island.
Blog With Photos & Details Here
__________________________
Bali Plans To Bring An End To Illegal Tourist Accommodation
Leaders in Bali are speaking out about the impact that illegally operating tourist accommodation is having on the island.
From the potential dangers to tourists to the impact on the environment and the lasting effects on the local economy and communities, one Bali-based academic says enough is enough.
From the potential dangers to tourists to the impact on the environment and the lasting effects on the local economy and communities, one Bali-based academic says enough is enough.
Blog With Photos & Details Here
__________________________
More Australia-Bali Flights To Be Added To Ngurah Rai Airport Schedule
New flight services have been added to the schedule at Bali’s I Gusti Ngurah Rai International Airport.
The new service will connect even more Australian tourists and holidaymakers with Bali, with more than 60 flights between the two destinations every day.
The new service will connect even more Australian tourists and holidaymakers with Bali, with more than 60 flights between the two destinations every day.
Blog With Photos & Details Here
__________________________
Indonesian Immigration Office Confirms Closures Will Affect Bali Tourists
As Indonesia prepares to celebrate Eid al-Fitr, and as Bali is getting ready to also observe the holy day of Nyepi, tourists on the island are being reminded that business hours will be different for the coming week or so.
Blog With Photos & Details Here
__________________________
Road Closures Will Affect Tourists In Bali This Week
As the island prepares for Nyepi, and as Indonesia prepares for the Eid al-Fitr festivities, there will be plenty more cars on the roads and new traffic systems in place to help keep everyone moving safely and easily.
Blog With Photos & Details Here
__________________________
Tourist visa applications for summer 2025 travel surge by 68 %
MUMBAI: Tourist visa applications for summer 2025 have witnessed an unprecedented 68% increase compared to the previous year, according to recent data from visa processing platform Atlys.
Blog With Photos & Details Here
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Last Weeks Bali News
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Indonesia sees tourism surge as visitors stay keen on Bali
From west to east, Indonesia’s thousands of islands stretch wider than Canada, meaning an array of options for travellers, and yet most tourists head to one island - Bali.
Blog With Photos & Details Here__________________________
Unexpected Reason Why Tourists Might Need To Rethink Airport Outfit When Traveling To Bali
Tourists traveling to Bali might need to reconsider their travel day outfits from now on. An amusing story coming out of I Gusti Ngurah Rai International Airport is a timely prompt for tourists entering Indonesia to give a moment’s thought to what they are going to wear when they arrive and depart from the province.
Blog With Photos & Details Here__________________________
The 24 best things to do in Bali
If you're looking for a guide to Bali's top attractions—along with insider tips for avoiding the hordes and uncovering some lesser-visited gems—you've come to the right place. Here are the best things to do in Bali.
Blog With Photos & Details Here__________________________
Trump Mulls Travel Ban On 42 Countries
The Trump administration is considering issuing sweeping travel restrictions for the citizens of dozens of countries as part of a new ban, according to sources familiar with the matter and an internal memo seen by Reuters.
Blog With Photos & Details Here__________________________
Where Asian celebrities went for their spring vacations
Popular Asian celebrities such as Zhang Ziyi, Irene Wan and Vincent Zhao explored Japan and Southeast Asian islands to enjoy the spring atmosphere.
Blog With Photos & Details Here__________________________
New Free Shuttle Bus Service Will Be Launched In Bali’s Sanur Tourism Resort
Bali’s OG tourism resort, Sanur, has undergone a serious transformation over the last fifty years, especially in the last year.
Sanur is about to become one of Asia’s leading medical tourism destinations and is set to welcome tens of thousands more tourists every year. Blog With Photos & Details Here__________________________
Bali tourist tax: Just how much does Bali make from international visitors
Bali is undoubtedly one of the most popular islands to visit, particularly among Aussies – and in just one year, it’s made a wild amount from tourists
Blog With Photos & Details Here__________________________
Bali’s Sanur Projected To Become Biggest Medical Tourism Destination In Asia
The team behind the new Medical Tourism Special Economic Zone in Bali’s Sanur has been speaking to the media about their vision for the future.
As Bali prepares to celebrate the opening of the new Bali International Hospital in a couple of months, all eyes are on Sanur as it embarks on a new chapter.
Blog With Photos & Details Here__________________________
Tourist Arrivals In Bali Continue To Rise As Island Prepares For Nyepi And Eid Festivities
Bali’s I Gusti Ngurah Rai International Airport keeps getting busier. As the only commercial airport in the province, Ngurah Rai International is the main gateway to the Island of the Gods.
As Bali prepares to observe both Nyepi and Eid, Bali Airport is bracing for a massive influx of domestic and international travelers.
Blog With Photos & Details Here__________________________
Indonesia's Bali to suspend telecom services for Nyepi Day on March 29
Jakarta (ANTARA) - Indonesia's Ministry of Communication and Digital Affairs said it would fulfill the Bali Provincial Government's request to temporarily suspend telecommunications and broadcasting services on the island during Nyepi (Silence) Day on March 29.
Blog With Photos & Details Here__________________________
Indonesia sees tourism surge as visitors stay keen on Bali
From west to east, Indonesia’s thousands of islands stretch wider than Canada, meaning an array of options for travellers, and yet most tourists head to one island - Bali.
Blog With Photos & Details Here
__________________________
Unexpected Reason Why Tourists Might Need To Rethink Airport Outfit When Traveling To Bali
Tourists traveling to Bali might need to reconsider their travel day outfits from now on. An amusing story coming out of I Gusti Ngurah Rai International Airport is a timely prompt for tourists entering Indonesia to give a moment’s thought to what they are going to wear when they arrive and depart from the province.
Blog With Photos & Details Here
__________________________
The 24 best things to do in Bali
If you're looking for a guide to Bali's top attractions—along with insider tips for avoiding the hordes and uncovering some lesser-visited gems—you've come to the right place. Here are the best things to do in Bali.
Blog With Photos & Details Here
__________________________
Trump Mulls Travel Ban On 42 Countries
The Trump administration is considering issuing sweeping travel restrictions for the citizens of dozens of countries as part of a new ban, according to sources familiar with the matter and an internal memo seen by Reuters.
Blog With Photos & Details Here
__________________________
Where Asian celebrities went for their spring vacations
Popular Asian celebrities such as Zhang Ziyi, Irene Wan and Vincent Zhao explored Japan and Southeast Asian islands to enjoy the spring atmosphere.
Blog With Photos & Details Here
__________________________
New Free Shuttle Bus Service Will Be Launched In Bali’s Sanur Tourism Resort
Bali’s OG tourism resort, Sanur, has undergone a serious transformation over the last fifty years, especially in the last year.
Sanur is about to become one of Asia’s leading medical tourism destinations and is set to welcome tens of thousands more tourists every year.
Sanur is about to become one of Asia’s leading medical tourism destinations and is set to welcome tens of thousands more tourists every year.
Blog With Photos & Details Here
__________________________
Bali tourist tax: Just how much does Bali make from international visitors
Bali is undoubtedly one of the most popular islands to visit, particularly among Aussies – and in just one year, it’s made a wild amount from tourists
Blog With Photos & Details Here
__________________________
Bali’s Sanur Projected To Become Biggest Medical Tourism Destination In Asia
The team behind the new Medical Tourism Special Economic Zone in Bali’s Sanur has been speaking to the media about their vision for the future.
As Bali prepares to celebrate the opening of the new Bali International Hospital in a couple of months, all eyes are on Sanur as it embarks on a new chapter.
As Bali prepares to celebrate the opening of the new Bali International Hospital in a couple of months, all eyes are on Sanur as it embarks on a new chapter.
Blog With Photos & Details Here
__________________________
Tourist Arrivals In Bali Continue To Rise As Island Prepares For Nyepi And Eid Festivities
Bali’s I Gusti Ngurah Rai International Airport keeps getting busier. As the only commercial airport in the province, Ngurah Rai International is the main gateway to the Island of the Gods.
As Bali prepares to observe both Nyepi and Eid, Bali Airport is bracing for a massive influx of domestic and international travelers.
As Bali prepares to observe both Nyepi and Eid, Bali Airport is bracing for a massive influx of domestic and international travelers.
Blog With Photos & Details Here
__________________________
Indonesia's Bali to suspend telecom services for Nyepi Day on March 29
Jakarta (ANTARA) - Indonesia's Ministry of Communication and Digital Affairs said it would fulfill the Bali Provincial Government's request to temporarily suspend telecommunications and broadcasting services on the island during Nyepi (Silence) Day on March 29.
Blog With Photos & Details Here
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Bali, with its stunning landscapes, rich culture, and warm hospitality, is the perfect destination.
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