Indonesia was Australia’s 13th largest trading partner in 2016 accounting for 2.3% of Australia’s trading relationship. Australia’s merchandise exports were worth A$6b in 2016 made up of wheat, crude petroleum, live animals, sugars, molasses and honey. Merchandise imports from Indonesia were worth A$4.9b consisting mainly of petroleum, heating and cooling equipment.
Australia also exported A$1.4b of services to Indonesia in 2016—made up largely of education and tourism. There were over 19,700 students studying in Australia in 2016 (3% of the total). There were also over 174,000 (2% of the total) tourist arrivals from Indonesia in 2016, a 14% increase from 2015.
The Indonesian consuming class —households with incomes of more than US$10,000 per annum—numbered 19.6 million in 2016 and is forecast to increase to 23.9 million by 2030. Australia is expected to benefit from rising Indonesian consumer demand for education, finance, healthcare, information and communications technology, and tourism in particular.
Indonesia is a marginal investor in Australia, owning a portfolio of just $1.2b in 2016. Australia’s largest investors remain traditional markets—the US with A$860b and the UK with A$515b. But regional flows are expanding quickly—ASEAN contributed 4% of inward foreign investment flows in 2016.
The stock of Australia’s investment in Indonesia is larger at A$9.2b (0.4% of the total in 2016). But the US (A$617b) and UK (A$350b) remain the leading destinations for Australia’s foreign investment.