Foreign investment in Indonesia has soared
2023.01.24 15:27
Foreign investment in Indonesia has soared
By Ray Johnson
Budrigannews.com – The investment minister stated on Tuesday that Indonesia’s annual foreign direct investment grew by 44.2% in 2022, with the base metals sector attracting the most inflows. He also noted that 2023 would be a more challenging year to attract investment.
Last year, the largest economy in Southeast Asia received FDI worth 654.4 trillion rupiah, or $45.6 billion, according to the official investment ministry calculation, which assumes a currency exchange rate of 14,350 to the dollar.
Investments in the banking and oil and gas industries are not included in the data.
The nation with a lot of resources has been trying to make the most of its abundant nickel reserves to grow its domestic battery and electric vehicle industries.
In order to ensure that investors have enough nickel ore for domestic processing, it ceased exporting the raw material in 2020.
The largest recipients of FDI were mining and base metals, where FDI totaled $11 billion and $5.1 billion, respectively. Singapore, China, and Hong Kong were the most significant sources.
According to Minister Bahlil Lahadalia, investor interest has also increased since the controversies Jobs Creation Law, which was passed in 2020 and streamlined procedures for business permits and revised labor regulations.
He stated that total investment, including that from domestic sources, reached 1,207.2 trillion rupiah ($81.02 billion), which was roughly in line with the goal set by the government.
The investment goal for this year is 1,400 trillion rupiah.
Bahlil stated that this year’s political campaigning ahead of Indonesia’s general elections in 2024 and the risks of a global recession could make it harder to secure investment.
He stated:
“The potential for recession is significant.” How can FDI enter the market if global conditions are not favorable?”
Bahlil stated that Germany’s BASF and France’s Eramet are working on a plan to invest $2 billion to $2.6 billion in an electric vehicle battery ecosystem in Jakarta, and they may begin construction this quarter.
In the beginning of this month, BASF and Eramet stated that their Indonesia project was still being evaluated.
In terms of rupiah, FDI increased by 43.3% in the final quarter of last year, reaching 175.2 trillion rupiah, or $12.2 billion in official U.S. dollar terms.
( $1 = 14,900,000 rup )
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