DIGITAL ECONOMY DEVELOPMENT AND ITS CONTRIBUTION TO ECONOMIC GROWTH IN INDONESIA

Abstract

Indonesia has emerged as the largest digital economy market in Southeast Asia. The rapid development of e-commerce, digital payments, financial technology (fintech), digital banking, and online platforms has transformed economic activities and consumer behavior across the country. This study aimed to examine the contribution of the digital economy to economic growth and financial inclusion in Indonesia. A descriptive quantitative approach was employed using secondary data obtained from Bank Indonesia, the World Bank, DataReportal, the Organisation for Economic Co-operation and Development (OECD), and the Google-Temasek-Bain e-Conomy SEA Report. The findings indicate that Indonesia's digital economy continues to expand significantly, supported by increasing internet penetration, widespread adoption of digital payments, and growing participation of micro, small, and medium enterprises (MSMEs) in digital ecosystems. QRIS has become a major driver of digital payment growth, while digital financial services have improved access to financial services among underserved communities. Indonesia remains the largest digital economy market in Southeast Asia, with its digital economy approaching USD 100 billion in gross merchandise value. However, challenges related to digital infrastructure disparities, cybersecurity risks, and digital literacy remain significant issues. The study concludes that strengthening digital infrastructure, enhancing digital skills, and improving regulatory frameworks are essential to maximize the benefits of digital transformation and support sustainable economic growth in Indonesia.