The Investment Coordinating Board (BKPM) announced on Wednesday that FDI fell 6.9 percent year-on-year (yoy) to Rp 97.6 trillion (US$6.67 billion) in the April-June period, continuing the downward trend recorded in the first three months of the year. In the first quarter, FDI dropped 9.2 percent yoy.

“The second quarter was a very difficult period,” BKPM head Bahlil Lahadalia said in a virtual presser on Wednesday. “We had not anticipated this; our aim was to attract Rp 200 trillion in the second quarter.”

Even before the pandemic, the government had been struggling to attract foreign investment and help investors realize their projects by cutting red tape and providing various incentives in a bid to support economic growth.

FDI contributes to more than 30 percent of Indonesia’s gross domestic product (GDP), making it the second-largest contributor after household spending. However, the pandemic has hit investment in the country as growth plunged to 1.7 percent yoy in the first quarter from 5.03 percent in the first three months of 2019, Statistics Indonesia (BPS) data shows.

Indonesia’s economy grew by 2.97 percent in the first quarter, the slowest in 19 years. The government expects the economy to shrink by up to 5.08 percent in the second quarter as the outbreak paralyzes business activity.

The BKPM reported that domestic direct investment (DDI) was also down, declining by 1.4 percent to Rp 94.3 trillion in the April-June period from the same three months last year. Overall, total investment in the second quarter dropped 4.3 percent yoy to Rp 191.9 trillion, putting the half-year figure at Rp 402.6 trillion.

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