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oreign direct investment (FDI) in Indonesia jumped by 18.4 percent to US$19.28 billion in 2011 and is expected to rise even further after two international credit rating agencies upgraded Southeast Asia’s largest economy’s sovereign rating to investment grade.

The Investment Coordinating Board (BKPM) announced on Thursday that the total realized foreign and domestic investment in Indonesia leapt by 20.5 percent to Rp 251.3 trillion ($27.64 billion) in the January-December period last year.

Investment from local investors rose by 25.6 percent to Rp 76 trillion in 2011 from a year earlier, contributing about 30 percent to the overall investment figure during the year.

The announcement was made one day after Moody’s Investor Service raised Indonesia’s rating to investment grade, just a month after the country regained the investment grade status from Fitch International after losing it 14 years ago during the 1998 Asian financial crisis.

“With these realized figures, we have managed to surpass last year’s target of Rp 240 trillion,” BKPM chief Gita Wirjawan announced during a press conference in Jakarta.

Foreign direct investment accounted for 69.8 percent of overall investment in 2011, with Singaporean investors being the first big spenders, giving $5.1 billion, or 26.3 percent of the total foreign investment, followed by Japanese investors ($1.5 billion) and US investors ($1.5 billion). For the first time, South Korea joined the top-five investors with investments of $1.2 billion.

“We predict that investment from South Korea will further increase; the fifth-ranking position among the top investors is only the beginning,” Gita said.

Among the realized projects are a steel plant in Cilegon, Banten, built by Posco Steel Corp. with state-owned steel producer PT Krakatau Steel Tbk. with an anticipated investment of $6 billion; and a tire plant in Lippo Cikarang in Bekasi, West Java, built by Hankook, the world’s seventh-largest tire maker, at a cost of $353 million.

Most foreign investment in 2011 was channeled into the transportation, warehousing and telecommunications sectors (19.51 percent), mining (18.58 percent), and electricity, gas and water projects (9.58 percent), most of which were located in Greater Jakarta, West Java and Banten.

Domestic investors contributed about 30 percent to the total investment, up from 29 percent a year earlier, and mostly concentrated on food crops and the plantation sector (12.3 percent), paper and printing (12.2 percent) and the electricity, gas and water sectors (12 percent), while favorable locations for local investors were West Java, East Java and Greater Jakarta.

The increase in foreign investment occurred while many multinational companies reduced their spending to cope with the global economic slowdown.

The Indonesian economy has grown steadily by more than 6 percent during the last two years, driven by domestic consumption supported by its vast population of almost 240 million people, as well as higher investment. Inflation eased to 3.79 percent at the end of last year, lessening the threat of the fast-growing economy overheating.

Gita said that despite positive achievements last year, the government would maintain its investment target of Rp 290 trillion this year, a 15.4 percent rise from last year, due to the worsening global economic outlook.

“I think for now we will maintain the Rp 290 trillion target, considering the fact that the world economic crisis will continue,” he said.