Investment in Indonesia Shows Strong Increase

If you are looking for a next destination country to invest, Indonesia might be the right answer for you. The country, who is in the middle of a massive infrastructure reform, has showed significant growth of investment for the past few years.

Recently, The Investment Coordinating Board of the Republic of Indonesia (BKPM) stated that until the first half of this year, Indonesia’s investment realization is showing to improve than last year. The investment growth is expected to continue to increase in Q3 of 2018. BKPM is even optimistic that this year investment target of Rp765 trillion ($55 billion) will be achieved. Among countries that invest heavily in Indonesia are Singapore, Japan, and China.

According to Thomas Trikasih Lembong, Head of The Investment Coordinating Board of the Republic of Indonesia, investment growth in 2018 has reached 7.9 percent so far. A business survey (SKDU) conducted by Bank Indonesia also shows that investment activity in Q2 of 2018 grew higher than the previous period.  Weighted Net Balance (SBT) of investment realization in the second quarter of 2018 was 11.73%, higher than 9.55% in the first quarter of 2018.

The industrial sector has played an important role in the growth and contributes greatly to the economy as 40 percent of the total investment in BKPM comes from industrial sector. The investment activities also come from various sectors such as financial services, real estate and corporate services.

Foreign Direct Investment in digital start-up in Indonesia also shows a strong growth with investments reach up to USD 3 billion. The investment in digital startup has contributed 15-20 percent of total foreign direct investment to the country.

The government is currently in the middle of a process to create an investment climate that can increase investor confidence and interest. One of the main reasons is because the government is relying on investment components as a source of economic growth.

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