Indonesia Becomes World’s 8th Largest Economy

JAKARTA, investortrust.id – The International Monetary Fund (IMF) has projected that Indonesia’s gross domestic product (GDP), adjusted for purchasing power parity (PPP), will reach $4.98 trillion in 2025. This places Indonesia as the world’s eighth-largest economy.

PPP-Adjusted GDP and Economic Growth

GDP based on PPP accounts for differences in living standards and price levels across countries, with values standardized in U.S. dollars.

"Indonesia’s GDP at current prices, adjusted for PPP, is expected to reach $4.98 trillion in 2025, with an estimated economic growth rate of 5.1% year-on-year," the IMF stated in its latest report released Thursday, January 30, 2025.

Strengthening Economic Partnerships

Teguh Anantawikrama, Vice Chairman of the Indonesian Chamber of Commerce and Industry (Kadin), emphasized that Indonesia's economy will strengthen further through effective international cooperation. He highlighted the need for Indonesia to establish closer ties with major economies such as India and to develop a regional “Malay supply chain” to solidify its influence in shifting global trade dynamics.

The United States, for example, is projected to continue reducing imports from China, with expectations that the new administration under President Donald Trump will adopt more protectionist trade policies.

"However, we can establish our own economic strength by developing a 'Malay' supply chain and deepening ties with India. This forms a closed-loop partnership among us. If we can successfully create a strong regional market, Western countries will have no choice but to engage with Indonesia," Teguh told Investortrust.id in Jakarta on Wednesday, January 29, 2025.

China Remains the Largest Economy

According to IMF data, China retained its position as the world’s largest economy based on PPP in 2024, with a GDP reaching $37.07 trillion. The United States followed in second place with $29.17 trillion.

India ranked third at $16.02 trillion, while Russia took the fourth spot with $6.9 trillion. Japan was fifth with $6.57 trillion, followed by Germany at $6.02 trillion and Brazil at $4.7 trillion. Indonesia secured the eighth position with a GDP of approximately $4.66 trillion.

Just below Indonesia, France recorded a real GDP of $4.36 trillion, while the United Kingdom stood at $4.28 trillion.