Indonesia: Foreign direct investment up 40% in 2Q22

  • Strong investment growth reflects confidence in Indonesia’s economy even as global conditions worsen due to rising benchmark interest rates aimed at containing decades-high inflation in many countries.
  • Realized investment rose 35.5% y/y in 2Q22 to IDR302.2tr, accelerating significantly from annual growth of 28.5% in 1Q22.
  • The cumulative six-month realization rose 32% y/y to IDR584.6tr, meeting 60.4% of the full-year target stated in the national medium-term development plan (RPJMN) – but only 48.7% of a goal set by President Joko “Jokowi” Widodo.
  • “The Investment Ministry is still optimistic that the IDR1,200tr investment realization target ordered by the President can be achieved,” Investment Minister Bahlil Lahadalia said.
  • Foreign direct investment (FDI) increased by 39.7% y/y to IDR163.2tr, while domestic direct investment rose 30.8% y/y to IDR139tr.
  • For 1H22, FDI is up 35.8% y/y to IDR310.4tr, accounting for 53.1% of overall realized investment, while its domestic counterpart increased 28% to IDR274.2tr.
  • “This report shows that, even amid multiple global uncertainties, Indonesia still has the hearts and minds of foreign investors,” Bahlil continued.
  • Provinces outside of Java once again outperformed as investment there grew 38% y/y to IDR157.1tr, or 52% of the national total, while investment in the more developed region of Java rose 32.9% y/y to IDR145.1tr.
  • Data for 1H22 show that investment outside of Java increased 34% y/y to IDR305.8tr, accounting for 52.3% of the nationwide total, while investment in Java was up 30% y/y at IDR278.8tr.
  • The base metals industry still accounts for most investment as it attracted IDR48.2tr in 2Q22, or 15.9% of total investment, followed by mining and the real estate industry, which received IDR33tr and IDR26.7tr, respectively.
  • In 1H22, the base metals industry received IDR87.9tr, or 15% of the total, followed by the mining and transportation industry with IDR68.2tr and IDR65.1tr, respectively.

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