According to the latest BMI Research by Fitch Group Indonesia’s growth over the next ten years will be driven by non-commodity sectors, replacing the country’s oil and gas as the economic drivers. The study entitled Ten Emerging Markets of the Future suggests that power network infrastructure, the automotive industry and consumer services such as e-commerce and health care may be the fields fueling economic development for the years to come.
Since the mining and oil and gas sectors will stagnate, Indonesia’s growth will become far less commodity-centric than during the past decade, the BMI Research states. The report expects an annual oil output for 2025 that would be 12.2 percent lower than in 2015. At the same time non-commodity areas are predicted to see a rapid growth due to major changes in infrastructure and manufacturing driven by the country’s government.
The study forecasts that electricity generation is to increase by 40 percent between 2015 and 2020, since the government is starting a 35,000 megawatt (MW) electricity procurement program. The automotive industry currently sells 90 percent of its production domestically and is to see 42.7 percent increases in annual vehicle production in the next ten years. This leads the report to highlight that Indonesia will develop as an increasingly important auto manufacturing hub within the Association of South East Asian Nations (ASEAN) trading bloc. Furthermore, the study suggests that e-commerce will show one of the fastest growth rates with 12.4 percent annually from 2016 to 2020.
The Fitch Group’s BMI Research includes Indonesia in the top-10 list of emerging markets in the future, along with other countries such as Vietnam and Kenya.