Indonesia, the world’s 10th largest economy in terms of purchasing power parity and a member and current chair of the G-20, has returned to the World Bank-designated ‘upper-middle income’ status following its continuing recovery from the economic impact of the pandemic.
Following democratisation, Indonesia made enormous gains in poverty reduction, cutting the poverty rate by more than half since 1999 and proudly reaching ‘upper-middle income’ status for the first time in 2020.
"This was an extraordinary achievement,” said Minister of Trade (Mendag) Muhammad Lutfi, as reported by merdeka(dot)com. “After 1998 the per capita achievement was only US$463. So, in the 20 years to 2018, our economic growth was 10 times or 1,000 percent."
But with its economy impacted by the pandemic, Indonesia dropped from ‘upper-middle income’ to ‘lower-middle income’ status in July 2021 and its poverty rate rose from the record-low of 9.2% in September 2019 to 10.4% in March 2021.
With its ‘upper-middle income’ status restored, Indonesia is now in a hurry to join the ’high-income’ country group. The next challenge, said the Minister, is “how we can triple our GDP, which is around US$4,000, to US$12,500.