Wednesday, 11 May 2022 11:07

Indonesia Investment Increases at the Beginning of the Year

Investment growth outside Java is currently quite stable and continues to increase significantly. In the first quarter of 2022, the realization of investment in Java was IDR 133.7 trillion and the realization of investment outside Java was IDR 148.7 trillion. When compared to the same period in 2021, there was an increase in investment in Java by 26.9% and an increase in investment outside Java by 30.0%. Investment growth outside Java can be seen with the entry of Riau and Central Sulawesi Provinces into the top five investment locations for Foreign Investment (PMA) and Domestic Investment (PMDN) in the first quarter of 2022. Three provinces outside Java with the largest realization of FDI investment, namely Central Sulawesi which ranks first with a percentage of 12.9%, followed by Riau 9.9% and North Maluku at 7.3%. "I was ordered by the President to realize inclusive and quality investment, namely a balance of investment realization in Java and outside Java, increasing the added value of natural and mineral resources, as well as the growth of new economic centers in the region. For this reason, all units in the Ministry of Investment / BKPM with out of the box efforts take steps to achieve inclusive investment," explained the Minister of Investment / BKPM Bahlil Lahadalia. On 27 April 2022, the Ministry of Investment / Investment Coordinating Board (BKPM) published data on the realization of investment realization in the first quarter (January–March period) for 2022. Investment realization in the first quarter was IDR 282.4 trillion, 28.5% higher compared to the same period in 2021. The achievement of quarter I-2022 also increased by 16.9% compared to quarter IV-2021. The achievements of the first quarter of 2022 contributed 23.5% of the realized target of IDR 1,200 trillion. In the last two quarters, the United States has entered the top five countries of origin for FDI, which proves the diversification of sources of origin, which is not only focused on the East Asian region. The top five countries of origin for FDI are Singapore (USD 3.6 billion, 34.8%); Hong Kong, China (USD 1.5 billion, 15.0%); China's RR (USD 1.4 billion, 13.2%); Japan (USD 0.8 billion, 8.0%); and the United States (USD 0.6 billion, 6.1%). "With the increase in the percentage of investment realization in the first quarter of 2022 to double digits compared to the first quarter of 2021, this shows that domestic and foreign investors' confidence is increasing in government policies, especially in the investment sector," said Bahlil Lahadalia.


Based on the investment activity report, domestic investment growth in quarter I-2022 increased by 25.1%, from IDR 108.0 trillion in quarter I-2021 to IDR 135.2 trillion. Investments in the transportation, warehouse and telecommunications sectors are the largest supporting sectors for the realization of domestic investment. Meanwhile, FDI investment in the first quarter of 2022 increased 31.8% compared to the first quarter of 2021 from IDR 111.7 trillion to IDR 147.2 trillion. The top five realizations of domestic investment based on business sector are transportation, warehouse, and telecommunications (IDR 27.0 trillion); mining (IDR 18.4 trillion); housing, industrial estates, and offices (IDR 17.5 trillion); food crops, plantations, and livestock (IDR 10.1 trillion); and the food industry (IDR 9.7 trillion). If all industrial sectors are combined, it can be seen that the industrial sector contributed IDR 25.6 trillion or 18.9% of the total PMDN. Based on project location, the top five realizations of PMDN investment are DKI Jakarta (IDR 22.9 trillion); West Java (IDR 21.2 trillion); East Java (IDR 15.4 trillion); East Kalimantan (IDR 10.2 trillion); and Riau (IDR 9.1 trillion). Meanwhile, the largest FDI realization for the January-March 2022 period was contributed by the basic metal, metal goods, non-machinery and equipment industrial sector. The increase in the realization of FDI investment, which mainly occurs in the basic metal, metal goods, non-machinery and equipment industrial sector, proves that President Joko Widodo's policy of banning the export of raw materials has succeeded in encouraging downstream investment in Indonesia, particularly the nickel processing industry and the iron and steel industry. The top five realizations of FDI investment by business sector are the basic metal, metal goods, non-machinery and equipment industry (USD2.6 billion); mining (USD 1.2 billion); electricity, gas and water (USD1.0 billion); transportation, warehouse, and telecommunications (USD0.9 billion); and the chemical and pharmaceutical industries (USD 0.8 billion). If all industrial sectors are combined, it can be seen that the industrial sector provides the largest contribution of USD 5.4 billion or 52.9% of the total FDI. If viewed based on project location, the top five realizations of FDI investment are: Central Sulawesi (USD1.3 billion); West Java (USD1.3 billion); DKI Jakarta (USD 1.2 billion); Riau (USD1.0 billion); and North Maluku (USD0.7 billion).


Based on business sector, the top five investment realizations (PMDN & PMA) are the basic metal industry, metal goods, not machinery and equipment (IDR 39.7 trillion, 14.0%); transportation, warehouse, and telecommunications (IDR 39.5 trillion, 14.0%); mining (IDR 35.2 trillion, 12.5%); housing, industrial and office areas (IDR 24.9 trillion, 8.8%); and electricity, gas and water (IDR 23.1 trillion, 8.2%). The manufacturing sector still plays a very important role in increasing investment realization and remains a driver of economic growth. The Ministry of Investment/BKPM also noted that the top five realized investments (PMDN & PMA) based on project locations were DKI Jakarta (IDR 40.4 trillion, 14.3%); West Java (IDR 39.5 trillion, 14.0%); Riau (IDR 23.7 trillion, 8.4%); East Java (IDR 23.6 trillion, 8.4%); and Central Sulawesi (IDR 20.0 trillion, 7.1%). In addition, there was also an increase in the realization of domestic investment in the first quarter of 2022 when compared to the same period in 2021 by 25.1%, from the realized investment value of IDR 108.0 trillion to IDR 135.2 trillion. Meanwhile, the realization of FDI investment in the first quarter of 2022 when compared to the same period in 2021 increased by 31.8%, from the realized investment value of IDR 111.7 trillion to IDR 147.2 trillion. Meanwhile, the realization of the absorption of Indonesian workers in the first quarter of 2022 reached 319,013 people who came from the PMDN project as many as 190,728 people and 128,285 people from the PMA project.

Source: https://indonesia.go.id/kategori/editorial/4785/investasi-meningkat-di-awal-tahun?lang=1

 

 

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