The Straits Times
Published on Sep 18, 2012

Indonesia could be 7th biggest economy by 2030: McKinsey


JAKARTA (REUTERS) - Indonesia could overtake Britain to become the world's 7th largest economy by 2030 - if it raises its growth rate to take advantage of a rapidly expanding consumer class, the McKinsey Global Institute said on Tuesday.

The Institute, linked to management consultant McKinsey & Co, said Indonesia's young population, ongoing urbanisation and growing middle class incomes favoured its growth prospects.

By 2030, Indonesia will add 90 million new consumers, with a services sector worth US$1.1 trillion (S$1.22 trillion).

But to meet its economic potential, Indonesia would have to overcome the chronic protectionism, over-regulation and poor transport infrastructure that hold back economic growth, it said. Critics cite corruption as another major impediment to growth.