Investment in Indonesia rises 40% on year in Q1 | Sector data
(Insider Stories) – Foreign direct investment in Indonesia grew 27.2% year-on-year to Rp 65.5 trillion ($6.8 billion) in the first quarter of this year, led by Japanese investment in the automotive sector, the head of Investment Coordinating Agency (BKPM) said on Monday.
BKPM said Japanese investors contributed the most capital, pouring $1.2 billion into Indonesia, followed by the U.S. ($900 million), South Korea ($800 million), Singapore ($600 million) and UK ($500 million).
BKPM chairman Chatib Basri said he acknowledged the effect of the global economic slowdown on Indonesia.
“If exports slow, they [investors] will [put a] hold on their investment,” the former advisor to Finance Minister Sri Mulyani Indrawati said.
The government, he said, will encourage investors to tap the consumer-oriented sector, which is still growing strong in Indonesia.
In total, FDI and domestic investment rose 39.6% on year to Rp 93 trillion while domestic investment grew 30.6% to Rp 27.5 trillion. BKPM uses an exchange rate of Rp 9,300 per dollar, in line with the 2013 state budget.
Chatib said the foreign investors pouring money into Indonesia include Japanese automotive company Toyota Motor Corp. (TM, 7203), which wants to invest Rp 13 trillion in the next few years to expand its plant in Karawang, West Java.
Other investors include Singapore company Lunar Crescent International Inc, which through Indonesian subsidiary PT Multistrata Arah Sarana Tbk (MASA), a tire maker, plans to invest $58 million to expand production capacity.
U.S.-based Cargill Inc. plans to invest in Indonesia through its palm oil unit in East Java province.
Other companies such as U.S.-based carmaker General Motors Co. (GM) and Germany’s Volkswagen AG (VOW) are seeking to tap the fast growing consumer sector in Indonesia.
