Indonesia's investment performance shows positive momentum, which should support achievement of the World Bank's projection of 5.0 percent economic growth for 2024, while Bank Indonesia is projecting 5.1%.

This is reflected in the third-quarter (Q3) investment report, released on 15 October 2024 by the Ministry of 
Investment/Investment Coordinating Board (BKPM).

Rosan P. Roeslani, Minister of Investment and Head of BKPM highlighted that the Government's consistent 
downstream policies have played a crucial role in driving investment growth. 

 

According to BKPM data, Q3 of 2024 saw total investment realization of Rp 431.48 trillion (US$27.79 billion), 
marking a 15.24 percent year-on-year increase and representing 76.45% of the Government’s target for 2024. 
Of this, Rp 91.51 trillion (21.2 percent) came from the downstream sector, contributing significantly to meeting 26.15 percent of the 2024 full-year investment target and creating 650,172 jobs.

In Q3, Domestic Direct Investment (DDI) increased by 11.62 percent year-on-year, rising from Rp 178.20 
trillion to Rp 198.83 trillion. 

Meanwhile, Foreign Direct Investment (FDI) grew by 18.55 percent year-on-year, from Rp 196.20 trillion to Rp 232.65 trillion, with FDI accounting for 53.92 percent of total investment in Q3 2024. The top five sources of FDI were Singapore ($5.50 billion), Hong Kong ($2.24 billion), China ($1.86 billion), Malaysia ($990 million), and the  
United States ($840 million). As usual, it is likely a significant proportion of the FDI from Singapore and, possibly, Hong Kong is from investors located in a third country that have established a regional holding company in 
Singapore or Hong Kong. 

 

The sectors attracting the most FDI are Metal Goods Industry (USD 3.03 billion), followed by Transportation, Warehouse and Telecommunication (USD 2.02 billion), Mining (USD 1.56 billion), Chemicals and Pharmaceuticals (USD 1.30 billion) and Food Industry (USD 920 million).  While for DDI the leading sectors are Transportation, 
Warehouse and Communications (Rp. 27.72 trillion), followed by Mining (21.24 trillion), Housing, Industrial Estate and Office Building (19.88 trillion), Food Industry is 4th at Rp 17.48 trillion and Other Services are in 5th position with Rp. 16.31 trillion.

In conclusion, Indonesia's positive investment trend in Q3 2024 highlights the country's continued appeal as a prime destination for investment.  With its robust economic fundamentals, strategic location, and dynamic market potential, Indonesia continues to offer abundant opportunities for businesses looking to expand in Southeast Asia. 

 By Pandu Biasramadhan, Business & Corporate Services Practice