Indonesia: Indonesia Sees Faster FDI Growth Since Jokowi’s Re-election

• Foreign direct investment in Indonesia jumped 18% y/y in 3Q19, marking a return of confidence as concerns over political uncertainty and policy discontinuity subsided following the re-election of President Joko “Jokowi” Widodo.
• The Investment Coordinating Board (BKPM) said on 31 Oct 19 that foreign direct investment had risen to IDR105tr (USD7.5bn) between Jul 19 and Sep 19.
• Domestic investment meanwhile increased by 19% to IDR101tr in the same period. Total investment rose to IDR206tr in the 3Q19, from IDR174tr in the same period in 2018. Investment growth slowed in the previous two quarters.
• “The Apr 19 legislative and presidential elections, which proceeded peacefully, sent a positive signal and it has had an impact since the 2Q19. This indicates that investment activities are picking up once more,” BKPM chairman Bahlil Lahadalia said.
• Total investment realization in the first nine months of 2019 reached IDR601tr, up 12% compared with the same period in 2018. Domestic investment amounted to IDR283tr, while foreign direct investment stood at IDR318tr.
• Bahlil said he believed the country could meet its IDR729tr investment target, noting that 76% of the target had already been achieved.
• Investment realization had also begun to shift outside Java, rising to IDR94tr in the 3Q19, which is 24% higher than in 2018. In comparison, investment increased by 14% in Java, Indonesia’s most populous island, which saw a IDR112tr injection in various projects.

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