Indonesian FDI in 2019 gain momentum after Joko Widodo re-election

Indonesian FDI in 2019 gain momentum after Joko Widodo re-election

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Foreign direct investment rebounded in the second quarter, reflecting renewed confidence among investors in the Indonesian economy following peaceful presidential and legislative elections.

Foreign investment increased 9.6 percent year-on-year to Rp 104.9 trillion ($7.48 billion) between April and June, according to data the Investment Coordinating Board (BKPM) made available on Tuesday. Investment declined 8 percent in the first quarter.

Thomas Lembong, head of the BKPM, expressed optimism that the recovery trend would continue following the April 17 elections, despite a protest against the outcome resulting in violent clashes in Jakarta.

Indonesian FDI in 2019
Indonesian FDI in 2019 Q4

President Joko “Jokowi” Widodo has vowed to be more aggressive in his reforms in his second term, with a renewed focus on making the investment process as frictionless as possible.

Read more on Joko Widodo’s priorities for 2019

Indonesia has been relying on foreign investment and loans to plug its current-account deficit. Foreign investment in projects such as manufacturing plants or unicorn startups is seen as more preferable than in financial assets, as it is less likely to flee the country in an economic downturn.

Foreign direct investment in the first six months exceeded $15 billion. The top five countries of origin were Singapore ($3.4 billion), Japan ($2.4 billion), China ($2.3 billion), Hong Kong ($1.3 billion) and Malaysia ($1 billion).

Domestic investment also rose to Rp 95.6 trillion in the second quarter, or Rp 182.8 trillion for the first half.

Farah Ratnadewi Indriani, acting deputy of the BKPM’s investment implementation control division, said the board has met half of its investment target for this year.

“There are still challenges, like the trade war and a global economic slowdown. But for Indonesia, I am very optimistic that the current trend will continue; future prospects are very positive,” Farah said.

Indonesian FDI in 2019
Indonesian FDI in 2019 | GDP 2019

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