Both domestic and foreign investment in Indonesia experienced robust growth, which should have a positive impact on the country's unemployment rate. Domestic direct investment (PMDN)¹ realization in QI-2013 grew 39.6 percent compared to Q1-2012, while foreign direct investment (PMA)² grew 27.2 percent compared to the same period last year. A little over half of total investments were realized on the island of Java (Indonesia's most populous island).

    Quarter I
  Quarter I
      71.2       93.0    30.6%
 – Domestic       19.7       27.5    39.6%
 – Foreign       51.5       65.5    27.2%

¹ in IDR trillion
Source: Indonesia Investment Coordinating Board (BKPM)

Muhamad Chatib Basri, chairman of the BKPM stated: “we have made some efforts to improve the investment climate, among others the simplification of investment licensing through the issuance of Chairman of BKPM Regulation Number 5 Year 2013. With the implementation of the new regulation, it is expected that the investment realization of foreign and domestic investment can grow significantly, particularly in the business sectors which provide high added value.”

The largest countries (in terms of foreign investment in Indonesia) are Japan (USD $1.2 billion), USA (USD $0.9 billion), South Korea (USD $0.8 billion), Singapore (USD $0.6 billion), and the United Kingdom (USD $0.5 billion).

Largest Sectors of Foreign Direct Investment in Indonesia (Q1-2013)

Sector     Amount
 in USD billion
Chemical and Pharmaceutical Industry         1.2
Metal, Machinery and Electronic Industry         1.0
Transport Equipment and Other Transport Industry         0.9
Paper and Printing Industry         0.6

Largest Sectors of Domestic Direct Investment in Indonesia (Q1-2013)

Sector      Amount
  in IDR trillion
Transportation, Storage and Telecommunication          6.0
Food Industry          4.0
Metal, Machinery and Electronic Industry          1.8
Electricity, Gas, and Water Supply          1.7

Source: Indonesia Investment Coordinating Board (BKPM)

The BKPM aims for investment realization of IDR 390.3 trillion (USD $40.2 billion) in 2013, an increase of 24.6 percent compared to the investment realization in 2012.

¹ Penanaman Modal Dalam Negeri
Penanaman Modal Asing