Central Java

Indonesia
Promising land for the World Manufacturing

Central Java

Economic Overview

As the central hub of the most important economic corridor in Indonesia, the “Java Island Economic Corridor,” Central Java Province is rapidly emerging as the new manufacturing capital of Indonesia, with the potential to be the next “Dongguan.”

Over the decade before the pandemic, the economy of Central Java Province exhibited stable growth, with an average annual growth rate of up to 9%.

Since the second quarter of 2022, the economic recovery has been even stronger, with a year-on-year growth of 5.66%, surpassing the national average growth rate of 5.44%.

Growth Drivers

The gross domestic product of Central Java Province is mainly composed of manufacturing (34.52%), agriculture, forestry, and fisheries (14.30%), wholesale and retail trade including car repair and motorcycle (13.48%), and construction (10.54%).

The manufacturing sector is the primary backbone of the province’s economy and will continue to be a significant driver of economic growth.

Investment Environment

The Central Java government has introduced a range of incentives aimed at attracting foreign enterprises to establish their presence. Eligible foreign companies can benefit from tax exemptions, fast-track approval services, and talent development services.

Particularly within special economic zones, industrial parks, and free trade zones, companies can enjoy various tax exemptions, including corporate income tax, import tax, and value-added tax exemptions. These incentives and services will further drive economic growth and attract foreign investment in Central Java Province.

Infrastructure Development

The infrastructure development in Central Java Province is advancing rapidly, including highways, airports, ports, industrial parks, and power facilities.

The continuous expansion and upgrading of these infrastructures provide significant convenience for commercial development and offer robust support for the overall economic development of the province.