Indonesia's diverse provinces are demonstrating remarkable potential for economic growth, each driven by unique industries and strategic investments. Here are five provinces that stand out in 2024 for their economic prospects. 

1. North Maluku

Economic Growth and Key Drivers 

North Maluku has emerged as Indonesia’s best-performing province, with a staggering 20.5% GDP growth in 2023. The province’s economic growth averaged 20.1% from 2021 to 2023, far exceeding the pre-pandemic average of 7.3%. This growth is primarily driven by the nickel mining and manufacturing sectors, which collectively account for over 50% of the province's economy. In 2023, North Maluku attracted US$5 billion in foreign direct investment (FDI), mainly into the nickel sector. 

Strategic Investments 

Key projects like the Obi Island Industrial Area and the Sonic Bay HPAL Complex, a $2.6 billion venture between Eramet and PT BASF, highlight North Maluku’s industrial potential. These projects focus on producing nickel-cobalt compounds essential for electric vehicle (EV) batteries and emphasize sustainable practices. 

Future Prospects 

With the global EV market's expansion, North Maluku is well-positioned for continued growth. The nickel sector's multiplier effect is expected to create more jobs and enhance the province's overall economic competitiveness. However, North Maluku needs to improve its digital and regional competitiveness, as it currently ranks low in national indices. 

2. Central Sulawesi

Economic Growth and Key Drivers 

Central Sulawesi, like North Maluku, has benefited significantly from investments in nickel mining and manufacturing. The province recorded 11.9% GDP growth in 2023, making it Indonesia's second-fastest growing province. From 2021 to 2023, the province's GDP grew by an average of 12.9%. In 2023, Central Sulawesi received $7.2 billion in FDI, making it the second top gainer of foreign investment in Indonesia.  

Strategic Investments 

The Indonesia Morowali Industrial Park (IMIP) in Morowali Regency is a major driver of economic growth, contributing 80% of the regency’s revenue. The development of new nickel pig iron smelters and the production of high-value nickel derivatives are set to further boost the province's industrial output. 

Future Prospects 

Central Sulawesi’s economic growth is expected to remain strong, supported by continued investment in nickel processing. While the province ranks relatively high in regional competitiveness, its digital competitiveness needs significant improvement. 

3. East Kalimantan

Economic Growth and Key Drivers 

East Kalimantan, the site of Indonesia’s new capital (IKN Nusantara) project, recorded 6.2% GDP growth in 2023. The province's economy is bolstered by its rich natural resources, particularly in mining and manufacturing. The average GDP growth from 2021 to 2023 was 4.4%, slightly higher than pre-pandemic levels. 

Strategic Investments 

East Kalimantan is attracting substantial investment due to the IKN project and several industrial initiatives, including the Maloy Batuta Trans Kalimantan SEZ and various nickel smelter projects. Investments in these sectors are expected to enhance the province’s economic base and attract further FDI. 

Future Prospects 

With a robust pipeline of projects and a strategic focus on industrial diversification, East Kalimantan is poised for sustainable economic growth. The province ranks high in both regional and digital competitiveness, positioning it well for future development. 

4. West Java

Economic Growth and Key Drivers 

West Java is Indonesia’s manufacturing powerhouse, with the sector contributing 42.9% to the province's GDP in 2023. The province experienced 5.0% GDP growth in 2023 and received $8.3 billion in FDI, the highest in Indonesia.  

Strategic Investments 

Significant projects include the PT HKML Battery Indonesia factory, a major EV battery producer, and the Jakarta-Bandung high-speed train, which is expected to boost regional tourism and economic growth. 

Future Prospects 

West Java’s strategic location and robust industrial base ensure its continued economic growth. The province is highly competitive, ranking near the top in both regional and digital indices, making it an attractive destination for future investments. 

5. Riau

Economic Growth and Key Drivers 

Riau is Indonesia’s leading crude palm oil (CPO) producer, with 2.9 million hectares of oil palm plantations. The province’s economy is driven by manufacturing, agriculture, and mining, contributing 31.9%, 27.1%, and 14.6% to GDP respectively. Riau recorded 4.2% GDP growth in 2023, with an average growth of 4.7% from 2021 to 2023. 

Strategic Investments 

Riau's significant CPO production, which constitutes 20% of Indonesia’s total, and its role as the largest oil-producing province, underscore its economic importance. Major companies like PT Pertamina Hulu Rokan are key players in the province’s petroleum sector. 

Future Prospects 

With its strong foundation in CPO and oil production, Riau is expected to maintain its economic momentum. The province ranks well in regional competitiveness but has room for improvement in digital competitiveness. 

Each of these provinces – North Maluku, Central Sulawesi, East Kalimantan, West Java, and Riau – demonstrates strong economic potential for 2024, driven by strategic investments and robust industrial sectors. While they each have unique strengths, their shared emphasis on resource development, manufacturing, and infrastructure projects positions them well for sustained growth in the coming years. 

This content was done in collaboration with Grant Thornton Indonesia. 

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