The government is confident that full-year investment realization will exceed its target as the value of investments recorded up to the third quarter of this year remains on track
he government is confident that full-year investment realization will exceed its target as the value of investments recorded up to the third quarter of this year remains on track.
The Investment Coordinating Board (BKPM) announced on Thursday that investment realization by both domestic and foreign businesses in the July-September period stood at Rp 140.3 trillion (US$10.35 billion), 17 percent up year-on-year (yoy).
So far this year investment realization amounts to Rp 400 trillion, which is 16.7 percent up on last year's Rp 342 trillion.
'We can say this year's realization will exceed our target,' BKPM head Franky Sibarani told a press briefing in Central Jakarta on Thursday. He said the trend in the last five years showed that investment realization value increased in the third or fourth quarter of the year.
In July, during the announcement of first-half investment realization, Franky said the government was convinced that total realized investment could reach Rp 530 trillion by the end of the year or almost Rp 11 trillion above the initial target of Rp 519.5 trillion.
As of the second quarter of this year, the government recorded Rp 135.1 trillion in realized investment.
Meanwhile, of the total realized investment from January to September this year, foreign direct investment (FDI) accounted for Rp 266.8 trillion, or 66.7 percent of the total, while domestic direct investment (DDI) stood at Rp 133.2 trillion, according to the board's data.
It also showed that FDI grew 16.9 percent yoy, while DDI rose 16.4 percent during the January-September period.
The data further showed that of the total realized investment year-to-date, new FDI accounted for 79 percent, slightly lower than 82.5 percent recorded in the first half of this year, and 61.4 percent for DDI, lower than 62.3 percent in June.
BKPM's deputy director for investment monitoring and implementation Azhar Lubis said during the briefing that the high value of new investment indicated that investors still believed in Indonesia's potential. 'The achievements show that many new businesses are flourishing,' he said.
He further outlined that between January and September this year, Singapore, Malaysia, Japan, South Korea and the Netherlands were the five biggest foreign direct investors in Indonesia, with their combined realized investments in the country reaching US$10.8 billion.
Azhar highlighted the emergence of China and Hong Kong in the top 10 list of investors in Indonesia, whose investments if combined would rank in seventh position, after the US. 'It is interesting to further observe their investment development,' he said.
Meanwhile, data from the BKPM also showed the transportation and telecommunication sector was the most realized domestic and foreign investment sector with Rp 52.6 trillion, or 13.1 percent of the total realized investment up to September, followed by mining with Rp 42.8 trillion or 10.7 percent and electricity, gas and water with Rp 37.9 trillion or 9.5 percent.
Franky said that all prioritized sectors saw hikes in realization value but labor-intensive industries, such as textiles, footwear, furniture and food and beverage saw a 13.4 percent drop.
Indonesian Food and Beverages Association (GAPMMI) chairman Adhi S. Lukman said recently that the decline of the rupiah against the US dollar had hurt the industry as most of its raw materials were still imported. He said this year the industry was projected to grow by only 10 percent from the normal 12 percent annually.
Data from the Trade Ministry showed the food and beverage industry booked growth of around 8 percent in this year's first half. (prm)
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