Realized Investment in Indonesia in 2013 Will Exceed Target of the BKPM
Head of the Indonesia Investment Coordinating Board (BKPM), Mahendra Siregar, is optimistic that total realized investments in Indonesia will exceed the target that is set for this year. The BKPM, a government institution, aims for investments worth of IDR 390 trillion (USD $32.5 billion) in 2013 and IDR 470 trillion (USD $39.2 billion) in 2014. Siregar is optimistic because many investors, particularly from Japan and the USA, are committed to engage in business expansion at the end of this year as well as next year.
Foreign and Domestic Investments (in IDR trillion)
| 2011 Semester I |
2012 Semester I |
2013 Semester I |
|
| Domestic Direct Investment | 33.0 | 40.5 | 60.6 |
| Foreign Direct Investment | 82.6 | 107.6 | 132.2 |
| Total Investment |
115.6 | 148.1 | 192.8 |
Foreign and Domestic Investments (annual percentage change)
| 2011 Semester I |
2012 Semester I |
2013 Semester I |
|
| Domestic Direct Investment | 50.7% | 22.7% | 49.6% |
| Foreign Direct Investment | 16.3% | 30.2% | 22.8% |
| Total Investment |
24.4% | 28.1% | 30.2% |
Source: Indonesia Investment Coordinating Board
Foreign investors are particularly interested to invest in Indonesia's transportation, communication, minerals, automotive, consumer goods, tourism and trade & retail sectors.
Siregar said that the BKPM is busy doing its homework to create a more conducive investment climate. This implies that several bottlenecks need to be resolved. The bottlenecks include infrastructure, land acquisition, bureaucracy, and legal certainty. The institution is also enhancing its one stop service for necessary permits.
Meanwhile, Indonesia's Vice President Boediono stated to expect economic growth of between 5 to 6 percent in 2014. A growth number above the six percent mark is difficult as the country needs to balance between financial stability and economic growth.
According to Boediono, inflation in 2013 will accelerate to about 8 percent (year-on-year) triggered by higher subsidized fuel prices and increases in non-rice food commodity prices.