Economic Growth to 2050

Mar 27th, 2006, in Business & Economy, by

A report by Price Waterhouse Coopers predicts that by 2050 the Indonesian economy will have grown to almost 20% the size of the US economy.

GDP Growth

Currently Indonesian GDP is 7% the size of the world giant America in purchasing power parity terms and 2% in current exchange rate terms.

Indonesia is included in a group called ‘E7’ which also is comprised of China, India, Brazil, Russia, Mexico and Turkey, the big guns of the developing world. By 2050, the report says, the ‘E7’ economies will have outstripped the current ‘G7’ (US, Japan, Germany, UK, France, Italy and Canada) “by between 25% when comparing GDP using market exchange rates to around 75% when using purchasing power parity (PPP) exchange rates”.

Indonesia, along with Mexico, is also predicted to have eclipsed both Germany and the UK by 2050 even at market exchange rates terms.

In per capita terms GDP, currently at $3,702 according to PPP, is thought likely to grow to $23,686 by 2050, the second lowest of all the countries measured, just above India, and some way behind China, the third lowest.

Year on year GDP growth from 2005-2050 is given at 7.3% in US$ terms, 4.8% in rupiah terms, and 4.2% at per capita PPP terms. Whichever way it is measured these growth rates would see Indonesia just behind India, and just ahead of China, in ranking terms.


Beyond 2050 though it is likely Indonesian growth will slow, or even decline, due to the effects of a somewhat more aging population. In 2050 the proportion of the population aged 15-59 is likely to have declined by almost 5% as compared to 2005. The growth rate of those aged 15-59 between 2005 and 2050 is given at 0.4%, (compare India with 0.8%, the highest, and Russia, -1.1%, the lowest).

Overall the population is expected to grow by 0.8% per year on average from 2005 to 2050.

Human Capital

Human capital value, hmm an awful phrase, is measured largely by educational achievement. Indonesia is currently at 53 relative to the United States base 100 and this is projected to improve to about 72 by 2050, although anyone with much familiarity with the local education system may wonder how this is going to be possible.

Much of the rest of the report is of a rather specialised nature and its understanding may require the sort of good grounding in economics of which your scribe is heinously bereft.

4 Comments on “Economic Growth to 2050”

  1. Naga says:

    Figures are the useful tools as bench mark for evaluating the level. However, the accuracy of figures must be re-check with actual situation of real sector of Indonesia economy right now!

  2. Raymond says:

    I can just laugh at this prediction! The country is not focused in developing its economy, it gets too distracted with other things, such as social and religious issues.

  3. ule says:

    I can’t believe to that prediction as long as indonesia’s goverment still do coruption maybe my prediction true that indonesia’s coruption will be increase 20% in 2050.

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