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Strong investment in Q1 but analysts warn about CPO policy
Foreign and domestic direct investment growth post 10-year high, but analysts warn the CPO export ban could harm Indonesia’s appeal in the eyes of investors.
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Investment Minister Bahlil Lahadalia speaks at a virtual press conference on April 27, 2022, in this screenshot from the Investment Ministry's YouTube account. (Investment Ministry Youtube Channel/Fadhil Haidar Sulaeman)
O
verall realized investment in Indonesia grew at the fastest pace in 10 years in the first quarter, rising 28.5 percent year-on-year (yoy) and 16.9 percent quarter-on-quarter (qoq) to reach Rp 282.5 trillion (US$19.5 billion).
Accounting for roughly half of that figure, foreign direct investment (FDI) increased 31 percent yoy and 20.5 percent qoq to Rp 147.2 trillion, while domestic direct investment rose 25 percent yoy and 13 percent qoq, respectively, to Rp 135.2 trillion.
“This achievement shows that the government is on track as its investment policies create confidence among domestic and foreign investors," Investment Minister Bahlil Lahadalia said at a press briefing on Wednesday.
Read also: Malicious investment: Red flags to watch out for
Regions outside of Java saw a faster increase with realized investment growth of 30 percent yoy to Rp 148.7 trillion, while investment in Java rose 26 percent yoy to Rp 133.7 trillion.
"Since the third quarter of 2020, investment in non-Java regions has stabilized [national] growth, and this is what the President had hoped for under the Indonesia-centric development framework," Bahlil explained.
The basic metals industry continues to account for the lion’s share of investment with Rp 39.7 trillion, or 14 percent of total investment, followed by transportation and mining, which received Rp 39.5 trillion and Rp 35.2 trillion, respectively.
