Located in Southeast Asia, Indonesia spans the waters between the Indian and Pacific Oceans. This archipelagic nation, known for its abundant natural resources and rich biodiversity, ranks as the world’s 17th-largest economy. Even in the face of global economic uncertainty, the country has maintained its strength in business and international commerce.

In the first nine months of 2025, Indonesia’s economy grew by 5%, a trend expected to continue into 2026 and 2027, supported by strong investment and net exports, according to the World Bank Group. Indonesia’s trade surplus widened in November to $2.66 billion, per Reuters, but fell below expectations as exports of commodities such as coal, nickel and copper dropped. In December, the region’s annual inflation reached a 20-month high at 2.92%, surpassing analyst’s’ projection of a 2.73% increase.

Although Indonesia has a market-based economy, the government plays a significant role, with price controls on key commodities. Stimulus measures have boosted private credit and consumption while maintaining fiscal discipline and moderate inflation.

In December, the Bank Indonesia (BI) kept its benchmark interest rate at 4.75%, to support economic growth and strengthen its currency. “The decision came after cumulative cuts of 150 bps since September last year, bringing the rate to its lowest level since October 2022 to support economic growth,” reads a Trading Economics report.

Indonesia remains strong in global trade, and a landmark trade deal with the United States will provide American businesses with market access in Indonesia that was once considered unattainable, unlocking major opportunities for the U.S. manufacturing, agriculture, and digital sectors. Under this agreement, Indonesia will apply a reciprocal tariff rate of 19% for U.S. exports.

Indonesia has the world’s largest young population, with 165 million people under the age of 30. Despite the sizeable workforce, labor market challenges persist, significantly affecting household welfare. According to the World Bank Group, the economy is creating jobs for most labor entrants, but the majority are in low-value added sectors, many of which fail to provide middle-class wages.

“Structural reforms can unlock productivity and driving the creation of better-paying jobs,” Carolyn Turk, World Bank Division Director for Indonesia and Timor-Leste told World Bank Group. “Improving skills, fostering competition, and strengthening the business environment through digitalization will open more opportunities for Indonesia to move towards high-value employment and ensure growth translates into better living standards for all.”

In December, Indonesian customers averaged six days beyond terms, according to FCIB’s Credit and Collections Survey. Results showed that payment delays remained unchanged for half of survey respondents, while 17% reported an increase and 33% experienced no delays. Payment delays were primarily attributed to customer payment policies (75%), billing disputes (50%) and supply chain or shipping issues (50%).

Survey respondents underscored the importance of knowing one’s customer. “Conduct thorough due diligence by applying the five Cs of credit and using all available resources to ensure you understand who you are doing business with.”