It marked an increase of 18.9% compared with the same period a year earlier, the slowest growth rate since the third quarter of 2011. Japan continued to topped Indonesia's FDI sources.  

 

"The trend of falling commodities prices weighed on investment in the mining sector,” BKPM Chairman Chatib Basri said.

Mining, which attracted about $1.2 billion in the second quarter, typically accounts for the majority of Indonesia’s foreign investment.   

BKPM, tasked with promoting and issuing investment licenses, also announced domestic investment rose 59.1% on-year to IDR33.1 trillion in the period.  

 

That brought total investments in the second quarter rising 29.8% to IDR99.8 trillion. In the January-June, FDI amounted to IDR132.2 trillion, while domestic investments totaled at IDR60.6 trillion.  

 

Thanks to a population of 240 million, the resource rich, domestically-focused Indonesia booked economic growth of more than 6% in the four of the past 5 years. It even managed to grow 4.5% in 2009, when much of the world were in recession, prompting analysts to tip the Southeast Asia's biggest economy to be among the world's top-ten economy by 2030. 

 

Going forward, however, investments may wane as investors expect the U.S. Federal Reserves to start unwinding its loose money policy and due to domestic monetary tightening by Bank Indonesia, Basri added.