Economists at UOB Group Enrico Tanuwidjaja and Haris Handy assess the newest FDI figures in Indonesia.

Economists at UOB Group Enrico Tanuwidjaja and Haris Handy assess the newest FDI figures in Indonesia.

Key Quotes
“Indonesia’s direct investment rose by 4.3% y/y in January – March 2021 period vs. 3.1% within the half-moon of 2021, underpinned by the positive performance of foreign direct investment (FDI) despite a contraction in domestic direct investment (DDI) during an equivalent period. the info from Investment Coordinating Board Indonesia (“Badan Koordinasi Penanaman Modal” – BKPM) showed FDI grew by 14.0% y/y to IDR 111.7tr (equivalent to USD 7.7bn, using 2021 national budget IDR rate of exchange assumption of IDR 14,600 per USD) in 1Q21 vs. 4Q20’s 5.5%. The rebound came because the global economy is slowly recovering from the COVID-19 and as Indonesia’s government begun to implement the Omnibus Law (on jobs creation) by issuing derivatives regulation (Presidential Regulation No. 10, 2021).”

“Singapore remained the most important foreign investor in Indonesia, with investment valued at USD 2.6bn for 3,634 projects, followed by China at USD 1.0bn for 813 projects.”

“BKPM said that the FDI realization in 1Q21 (23.8% of 2021 target) shows the world’s confidence within the investment climate and potential in Indonesia. additionally , the govt has completed another Omnibus Law derivative regulation, associated with the implementation of risk-based approach licensing.”

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