Indonesia's digital economy likely to reach 360 billion USD by 2030

 Indonesia's digital economy will maintain its upward trajectory until 2030, with a projected value ranging from 220-360 billion USD, according to recent studies.

The e-Conomy SEA research study by Google, Temasek, and Bain & Company, the digital economy of Indonesia reached 77 billion USD in 2022, 22% higher than that of 2021. The figure is anticipated to continue rising, reaching 130 billion USD in 2025 and potentially ranging from 220 billion USD to 360 billion USD by 2030.

Director of the Digital Economy Centre of Economic and Law Studies (Celios) Nailul Huda said that Indonesia's digital economy has demonstrated robust growth since 2019, even in the face of financial challenges resulting from reduced venture capital investments in tech startups during 2021 and 2022.

He said after the period commonly dubbed as the "tech winter", Google revised its projection for Indonesia's digital economy in 2025 from 146 billion USD to 130 billion USD.

Speaking at the BNI Investor Daily Summit (IDS) 2023 on October 24, Naiul said that Indonesia's digital economy over the last five years, especially from 2019 to 2021, saw significant growth. However, its growth was hindered by the stagnation in investments by investors during the 2021-2022 period.

Corina Leyla Karnalies, Digital & Integrated Transaction Banking Director at BNI, said that during the COVID-19 pandemic, there was a massive shift towards digitalisation in Indonesia. When social restrictions were imposed during the pandemic, physical bank branches had to close, compelling banks to digitalise their services.

George Hendrata, CEO of Tiket.com, expressed optimism about the potential for greater growth in Indonesia's digital economy which is approximately 40% of the digital economies of Southeast Asian countries with a total value of around 194 billion-200 billion USD in 2022.

Indonesia has also survived the challenging times of COVID-19. Currently, its tourism industry, including online travel, is beginning to recover, Hendrata said.

He added that Indonesia's online travel market has grown by approximately 2-3 times the growth of the gross domestic product (GDP). While the national economic growth rate of about 5%, the total online travel market has seen growth ranging from 10-15%.

Despite this growth, online travel penetration in Indonesia is still at around 45%, much lower than in advanced countries like China (60%), the US, or the EU (80%)./.

VNA