10 October 2025 (closed)
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Indonesia's Investment Coordinating Board (BKPM) has released the direct investment figures - both foreign direct investment (FDI) and domestic direct investment (DDI) - for the fourth quarter of 2016 (implying we now also know the full-year 2016 figures). The BKPM data show a number of interesting developments that we outline below.
Investment realization in Indonesia's capital city of Jakarta fell to IDR 51.2 trillion (approx. USD $3.8 billion) in full-year 2016, down from IDR 55 trillion worth of investment in the preceding year. Foreign direct investment (FDI) in Jakarta was recorded at IDR 41.5 trillion in 2016, while domestic direct investment (DDI) reached IDR 9.7 trillion. What explains this overall decline of investment in Jakarta?
The Institute for Development of Economics and Finance (Indef) argues that economic development that has occurred during the first two years of the government under the leadership of President Joko Widodo is too much centered on the island of Java, Indonesia's most populous island and the political and economic center of Southeast Asia's largest economy. Java, particularly the Greater Jakarta region, contributes about 60 percent to the total Indonesian economy.
Regional development bank Asian Development Bank (ADB) has become slightly less optimistic about Indonesia's economic growth in the years 2016 and 2017, although the Manila-based institution emphasizes that Southeast Asia's largest economy remains growing at a healthy pace. In its latest Asian Development Outlook 2016 the ADB cut its forecast for Indonesia's economic growth to 5.0 percent (y/y) in 2016 (from 5.2 percent previously) and to 5.1 percent (y/y) in 2017 (from 5.5 percent previously).
Indonesian entrepreneurs say their credit demand is limited due to few expansion and investment plans ahead of the end of the year. Although the Indonesian economy is recovering - reflected by accelerated GDP growth figures in the first two quarters of the year - demand from abroad for Indonesian products remains weak, while domestic demand remains somewhat subdued as well (reflected by the nation's structurally weakening export and import figures over the past 15 months). As a result credit growth has been slowing accordingly.
There is plenty of room for optimism about the direction of Indonesia's economic growth this year. Indonesia's Statistics Agency (BPS) announced on Friday (05/08) that the economy of Southeast Asia's largest economy expanded by 5.18 percent (y/y) in the second quarter of 2016, a figure that exceeded all expectations and forms a remarkable jump from the 4.66 percent (y/y) GDP growth figure in Q2-2015 and 4.91 percent (y/y) in Q1-2016. As a result, Indonesia's benchmark Jakarta Composite Index is currently near record levels.
Direct investment in Indonesia (both domestic and foreign) totaled IDR 298.1 trillion in the first half of 2016, up 14.8 percent from investment realization in the same period one year earlier. Foreign direct investment (FDI) was recorded at IDR 195.5 trillion¹, up 12.3 percent (y/y) - and accounting for 65.6 percent of total investment realization in the first six months of 2016 - while domestic direct investment (DDI) rose 20.0 percent (y/y) over the same period. On a quarter-to-quarter basis, FDI into Indonesia rose 7.9 percent, considerably lower than the 17.1 percent (q/q) growth pace in the preceding quarter.
The World Bank released the June 2016 edition of its Indonesia Economic Quarterly (IEQ) report on Monday (20/06). Recently, the Washington-based institution took a rigorous step by downgrading its 2016 global economic growth forecast from 2.9 percent (y/y) to 2.4 percent (y/y). This is a significant downgrade that was primarily due to the weak performance of commodity exporters. Despite this downgrade the World Bank still sees a resilient Indonesian economy, reflected by a GDP growth forecast of 5.1 percent (y/y) in 2016 and 5.3 percent (y/y) in 2017.
In line with expectations, the government of Indonesia revised down its economic growth target in 2016 from 5.3 percent (y/y) to 5.1 percent (y/y) amid subdued private consumption, slower-than-expected private investment, and low commodity prices. Meanwhile, the World Bank also cut its forecast for Indonesia's economic growth in 2016 to 5.1 percent (y/y), down from its earlier prediction of 5.3 percent (y/y). The World Bank also slashed its outlook for global growth from 2.9 percent (y/y) to 2.4 percent (y/y) this year.
Investors from South Korea plan to invest up to USD $18 billion in Indonesia. Indonesian President Joko Widodo, Chairman of the Chamber of Commerce & Industry (Kadin) Rosan Perkasa Roeslani, Trade Minister Thomas Lembong and Foreign Minister Retno Marsudi witnessed the signing of business agreements and memorandums of understanding (MoU) in Seoul on Monday (16/05), covering bilateral cooperation in infrastructure development such as power plants, gas pipelines and railways as well as trade, creative economy, environment, and maritime affairs.
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The economic growth rate of Indonesia in the first quarter of 2025 (Q1-2025) came in slightly below our projection of 4.9 – 5.0 percent year-on-year (y/y). But, indeed, we had already detected a (general) weakening in internal and external conditions, which was reflected in the macroeconomic data of Indonesia that we discussed in our April 2025 report. And so, it was certainly not a shock.
On 24 February 2025, Indonesian President Prabowo Subianto was joined by two former Indonesian presidents (Susilo Bambang Yudhoyono and Joko Widodo) when he launched Danantara, Indonesia’s new sovereign wealth fund. Likely, the presence of two former presidents served to underline the historic significance of this launch as well as underscoring broad-based political support for the move.
Indonesia’s economic growth in the fourth quarter of 2024 was slightly better than we had anticipated. Just prior to the release of Indonesia’s gross domestic product (GDP) data on 5 February 2025 (by Badan Pusat Statistik, BPS), we revised our outlook for Indonesia’s Q4-2024 economic growth from 5.0 percent year-on-year (y/y) to the range of 4.9–5.0 percent (y/y) due to a number of weaker-than-estimated macroeconomic data.
Indonesia’s economic growth in the second quarter of 2024 (Q2-2024) was good, although slightly below our projection of 5.1 percent year-on-year (y/y). According to the latest gross domestic product (GDP) data, which were released by Indonesia’s Statistical Agency (in Indonesian: Badan Pusat Statistik, BPS) on 5 August 2024, the Indonesian economy expanded by 5.05 percent (y/y) in Q2-2024.
On 5 May 2023, Indonesia’s Statistical Agency (Badan Pusat Statistik, BPS) released the latest official Gross Domestic Product (GDP) data of Indonesia. BPS announced that the Indonesian economy expanded by 5.03 percent year-on-year (y/y) in Q1-2023, a good result that is in line with our expectations.
On 06 February 2023, Indonesia’s Statistical Agency (Badan Pusat Statistik, or BPS) released the latest official gross domestic product (GDP) data of Indonesia. The data were in line with expectations.
On 7 February 2022, Indonesia’s Statistical Agency (Badan Pusat Statistik, or BPS) announced the latest gross domestic product (GDP) data of Indonesia, covering the final quarter of 2021.
The economic rebound in the second quarter of 2021 – with a +7.07 percent year-on-year (y/y) growth pace – was great for Indonesia, albeit it is obviously related to the ‘low base effect’ (as Indonesia had hit its rock bottom in the same quarter one year earlier). But what about the future, or more precisely: Q3-2021?
On 9 August 2021, Indonesian President Joko Widodo witnessed the launch of the new Online Single Submission (OSS) system at the Investment Ministry (also known as the Investment Coordinating Board, abbreviated as BKPM).
Subscribers to our reports may remember that we put some question marks behind recent data released by the Investment Coordinating Board (in Indonesian: Badan Koordinasi Penanaman Modal, or BKPM) related to direct investment realization in Indonesia.
