Indonesia - Transport and Logistics: New initiatives to provide growth opportunities (Strategy, Performance and Risk Analysis)
GVA from the transportation sector in Indonesia recorded a CAGR of 11.7%, from US$33.4bn in 2012 to US$58.1bn in 2017 and is anticipated to register a CAGR of 19.8%, from US$68.8bn in 2018 to US$142.0bn in 2022. This was largely driven by growth in freight traffic due to an increase in trade. The government is collaborating with the World Bank for the development of road infrastructure in the Western Indonesia Road Improvement initiative and according to the plan; the government will receive funding worth US$250m for the development and modernization of roads, which is anticipated to expedite the movement of freight.
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Road transport GVA in Indonesia to increase
GVA for road transport in Indonesia recorded a CAGR of 9.5%, rising from US$17.0bn in 2012 to US$26.7bn in 2017, and is anticipated to register a CAGR of 15.8%, from US$30.8bn in 2018 to US$55.4bn in 2022. This is primarily attributed to a rise in the number of road passengers, which recorded a CAGR of 0.9%, from 207.4 million in 2012 to 217.3 million in 2017 and is forecast to post a CAGR of 4.0%, from 223.0 million in 2018 to 261.2 million in 2022.
Construction of new tracks to drive freight traffic
Indonesia’s rail freight traffic recorded a CAGR of 11.4%, from 7,304.0 million ton km in 2012 to 12,541.9 million ton km in 2017 and is anticipated to register a CAGR of 10.7%, from 13,990.6 million ton km in 2018 to 21,000.8 million ton km in 2022. This is primarily attributed to increased freight volumes on account of rising demand.
Increasing water freight volume to drive water transport GVA
GVA for water transport in Indonesia recorded a CAGR of 2.8%, from US$3,877.2m in 2012 to US$4,447.1m in 2017 and is anticipated to register a CAGR of 8.7%, from US$4,808.1m in 2018 to US$6,718.5m in 2022. A key reason for the growth is a rise in the volume of water freight, which recorded a CAGR of 14.9%, from 355.0 million tons in 2012 to 712.4 million tons in 2017 and is anticipated to register a CAGR of 18.5%, from 822.7 million tons in 2018 to 1,620.1 million tons in 2022, due to the anticipated rise in total exports over the forecast period.
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