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Investment remains bullish despite upcoming election with 17% FDI growth

Jakarta Globe - October 20, 2023

Arnoldus Kristianus, Jakarta – The Ministry of Investment/Indonesia Investment Coordinating Board (BKPM) has reported that the investment realization for the period from January to September 2023 has reached Rp 1,053.1 trillion, representing 75 percent of this year's Rp 1,400 trillion target set by President Joko Widodo (Jokowi).

The growth represents an 18 percent year-on-year increase, with foreign direct investment (FDI) grew by 16.7 percent to reach Rp 559.6 trillion as compared to the same period in 2022, and domestic investment rose by 19.5 percent to Rp 493.5 trillion. Throughout this period, the investment realization has created job opportunities for 1,365,648 Indonesian workers.

"Even as we enter a political year, global attention remains focused on our investments, as evidenced by the continuously increasing investment realization," said Minister of Investment, Bahlil Lahadalia, on Friday. Indonesia is going to hold its general election in February 2024. Previously, many investors had expressed their intention to adopt a "wait and see" approach before committing to invest in Indonesia.

In the third quarter, the BKPM reported an investment realization of Rp 374.4 trillion, marking a 21.6 percent increase compared to the same period in 2022. Foreign investment grew by 16.2 percent year-on-year, reaching Rp 196.2 trillion, while domestic investment posted a growth of 28.2 percent to Rp 178.2 trillion.

Investment realization outside of Java reached Rp 545.8 trillion in the first nine months of 2023, marking a yearly increase of 15.6 percent. Meanwhile, investment realization in Java amounted to Rp 507.3 trillion, a 20.7 percent increase compared to the same period in 2022.

"Despite the substantial infrastructure and logistical facilities in Java, we have managed to penetrate other regions significantly. Equal distribution continues to be a priority, as emphasized by President Joko Widodo, with a focus on building an Indonesia-centric approach," explained Bahlil.

The top five regions with the highest investment realization in 2023 were West Java (Rp 153.2 trillion), Jakarta (Rp 130.3 trillion), East Java (Rp 100.1 trillion), Central Sulawesi (Rp 83.6 trillion), and Banten (Rp 78.6 trillion).

The top five sectors in terms of investment realization for the first nine months of 2023 were basic metal industry, metal goods, non-machinery, and equipment (Rp 146 trillion); transportation, warehousing, and telecommunications (Rp 120 trillion); mining (Rp 113.3 trillion); housing, industrial areas, and office areas (Rp 83.7 trillion); and chemical and pharmaceutical industries (Rp 76.8 trillion).

Singapore, China, Hong Kong, Japan, and Malaysia are the top five investor countries during the July-September 2023 period.

Source: https://jakartaglobe.id/business/investment-remains-bullish-despite-upcoming-election-with-17-fdi-growt