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Indonesia clinched the Direct Investment goal in 2019 – UOB

Economist Enrico Tanuwidjaja at UOB Group reviewed the Indonesian direct investment figures during the last year.

Key Quotes

“Indonesia booked a total of IDR 809.6tn direct investment in 2019. This represented 102.2% of the total direct investment target and an increase by 12.2% y/y from IDR 721.3tn (4.1% y/y) seen in 2018. The result was driven by both higher Domestic Direct Investment (DDI – 125.4% of target) and Foreign Direct Investment (FDI – 87.5% of target) as compared to 2018 and despite the global economic moderation and a wait-and-see approach from investors during the 2019 general election year.”

“Singapore remained the largest foreign investor in Indonesia last year, with investment valued at IDR 97.7tn for 7,020 projects, followed by China at IDR 71.1tn for 2,130 projects, and Japan at IDR 64.7tn for 3,835 projects. Transportation, warehouse and telecommunication sectors were the largest recipients of DDI in 2019, valued at IDR 68.1tn. Meanwhile, electricity, gas, and water supply were the leading sectors for FDI at IDR 88.9tn.”

“Despite FDI number falling short of the target, the 2019 performance reflected higher confidence among investors in the Indonesian economy.”

“Advancing forward, we are cautiously optimistic that Indonesia will be able to reach the target and attract much-needed longer-term investment in the country, given the resilient of domestic economy, prudent fiscal spending, as well as continuous reforms and policy actions from the government. In addition, improvement in ground implementation needs to be ensured to in order to achieve lower perception of risk, and higher levels of investment in the future.”

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