Antara, Jakarta – Indonesia remains attractive for foreign investors to invest in government projects amid the government's leadership transition, Antara news agency cited a Grant Thornton Indonesia report on Indonesia's economic prospects in 2024.
The report, which was launched in Jakarta on Wednesday, said that although President Joko Widodo's leadership change has led to a "wait-and-see" attitude among some investors, Indonesia remains attractive to foreign investors.
Government infrastructure projects, the development of the Capital City of Nusantara (IKN), and business-friendly policies are said to increase foreign investors' interest in Indonesia.
The report also underscores a surge in domestic consumption, with Indonesia's GDP growth projected to be robust at between 5.3-5.7 percent, driven by a wave of spending triggered by the 2024 elections and a booming middle class.
Furthermore, there is an uptick in investment trends amid global economic pressures, with Indonesia's investment sector showing promising prospects, especially in government infrastructure projects and the development of IKN.
The report said the metals, mining, and transportation sectors including warehousing and telecommunications are also likely to be the main attraction for investors in 2024. This is supported by government policies to encourage stronger development of downstream industries.
The "new era of nickel" in Indonesia, where the mining sector, especially nickel, promises bright investment opportunities along with the electric vehicle (EV) revolution, the report says. While prospects for foreign direct investment (FDI) in 2024 showed optimism with the estimated value of FDI reaching around US$55 billion (Rp873.96 trillion), higher than in 2023, which was recorded at US$50 billion (Rp794.51 trillion).
The report also discusses five provinces that are expected to be the center of investors' attention in 2024, namely North Maluku, Central Sulawesi, East Kalimantan, West Java, and Riau. Each province is considered to have a unique and promising economic landscape, and offers a variety of investment opportunities in Indonesia.
North Maluku, for example, is known for its now thriving nickel industry, becoming a key player in the global market. Meanwhile, Central Sulawesi stands out with its strategically sustainable agribusiness practices, boosting resilience and growth. While East Kalimantan, with its IKN project, promises strong economic growth.
West Java province, which is Indonesia's manufacturing hub, is expected to continue to attract investors with its superior manufacturing expertise and potential in the electric vehicle industry. Riau, known as the largest producer of crude palm oil (CPO) in Indonesia, is also considered to have promising potential.
Besides palm oil, another important commodity for Riau is oil. Riau Province is the largest oil producer in Indonesia. Riau's oil export value was recorded at US$384.1 billion in 2020, increasing again to US$586.2 billion in 2021 and jumping to US$1,420.2 billion in 2022.