The most popular destinations of foreign direct investment in Indonesia in 1H-2016 were the paper and printing industry (USD $2.4 billion), the metal, machinery and electronic industry (USD $1.6 billion), and the chemical and pharmaceutical industry (USD $1.5 billion). The second-biggest investor in Indonesia in 1H-2016 was Japan with USD $2.90 billion.

Singapore remained the biggest source of foreign investment. During the January-June 2016 period, Singaporean companies invested some USD $4.89 billion in Southeast Asia's largest economy (in a total of 2,675 projects). This is considerably higher than the USD $3.2 billion that was invested by Singapore in Indonesia in the same period one year earlier.

Although investment realization in Indonesia is still highly focused on the island of Java, investment in the "Outer Islands" rose at a higher pace in the January-June 2016 period. Investment on Java climbed 12.4 percent (y/y) to IDR 162.6 trillion, while the combined investment in all other parts of Indonesia stood at 135.5 trillion, up 17.7 percent (y/y). Rapidly rising investment realization outside Java is highly welcomed as it will reduce existing inequality between the economic development of Java and the rest of the country.

Thomas Trikasih Lembong, the newly appointed Chairman of the Indonesia Investment Coordinating Board (BKPM) - replacing Franky Sibarani -, remains optimistic that the total investment realization target for full-year 2016 - set at IDR 594.8 trillion - can be achieved.

¹ BKPM uses a IDR 13,900 per US dollar exchange rate (in line with the rate set in the 2016 State Budget)

Foreign and Domestic Investment in Indonesia (in IDR trillion):

                               2014
                            2015         2016
  Q1   Q2   Q3   Q4   Q1   Q2   Q3   Q4   Q1   Q2
Domestic Direct
Investment
 34.6  38.2  41.6  41.7  42.5  42.9  47.8  46.2  50.4  52.2
Foreign Direct
Investment
 72.0  78.0  78.3  78.7  82.1  92.2  92.5  99.2  96.1  99.4
Total Investment
106.6
116.2 119.9 120.4 124.6 135.1 140.3 145.4 146.5 151.6

 

                         2011
                     2012                      2013
 Q1  Q2  Q3  Q4  Q1  Q2  Q3  Q4  Q1  Q2   Q3   Q4
Domestic Direct Investment 14.1 18.9 19.0 24.0 19.7 20.8 25.2 27.5 27.5 33.1  33.5  34.1
Foreign Direct Investment 39.5 43.1 46.5 46.2 51.5 56.1 56.6 65.5 65.5 66.7  67.0  71.2
Total Investment
53.6  62.0 65.5 70.2 71.2 76.9 81.8 83.3 93.0 99.8 100.5 105.3

Source: Indonesia Investment Coordinating Board (BKPM)

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