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Jakarta Post

FDI flows show sign of recovery during first half of year

  • Rachmadea Aisyah

    The Jakarta Post

Jakarta   /   Tue, July 30, 2019   /   03:51 pm
FDI flows show sign of recovery during first half of year The chairman of the Investment Coordinating Board, Thomas Trikasih Lembong, is optimistic investments would record a double-digit growth this year after a 7.4 increase in the first half. (The Jakarta Post/Donny Fernando)

Foreign direct investment (FDI) showed signs of recovery during the first half of this year following a downward trend seen since the end of last year.

The Investment Coordinating Board (BKPM) reported on Tuesday that the realization of total investments in the country reached Rp 395.6 trillion (US$28.2 billion) during the first half of 2019, up by 9.4 percent in the same period last year.

The increase was higher than the 7.4 percent in the same period last year as investors resumed their business expansions following a time of wait-and-see ahead of the April elections.

The realization of FDI rose by 4 percent year-on-year (yoy) from the first half of 2018 to Rp 212.8 trillion, whereas domestic investments showed a higher growth of 16.4 percent yoy to Rp 182.8 trillion.

Although the increase in the FDI was still relatively small from January to June, the FDI flows into the country showed signs of recovery after a weak performance in the first quarter and throughout 2018, during which the realization of the FDI was 0.9 percent yoy and 8.8 percent yoy, respectively.

Following the positive performance, the board maintained its double-digit investment growth by the end of this year, BKPM head Thomas Trikasih Lembong said.

Earlier in May, Thomas said the combined growth for domestic and foreign investments would likely total 13 percent.

"I am optimistic that this recovery trend in investments will continue," Thomas told a press briefing on Tuesday. "Several large-scale investors such as the Crown Prince of the United Arab Emirates, Softbank and Hyundai have lined up to discuss investments with the President."

The positive outlook, he said, was thanks to Indonesia's success in concluding the presidential and legislative elections, a political reconciliation between the two competing presidential candidates, incumbent Joko "Jokowi" Widodo and Prabowo Subianto, and a rating upgrade provided by the Standard and Poor's. (hen)