Micro Business

Positive Signals for Investment Realization in Indonesia Quarter III 2020

Amid the Indonesian economy which is currently entering a recession phase, positive news comes from the direct investment sector in Indonesia. It was noted that the realization of investment in Indonesia in the third quarter of 2020 experienced positive growth, both domestic investment and foreign investment. This is a green light for all economic actors to be more active in moving their businesses amid the COVID-19 pandemic. The following is the complete information regarding the realization of investment in Indonesia in the third quarter of 2020.

An increase of 8.9% from the second quarter of 2020

The Head of the Investment Coordinating Board (BKPM), Bahlil Lahadalia, stated that the realization of investment in Indonesia in the third quarter of 2020 reached a value of IDR 209 trillion. If it is accumulated with the total realization of investment in Indonesia per January-September 2020, then BKPM records the realization of investment in Indonesia of Rp. 611.6 trillion.

This achievement was welcomed by the government considering the stretching of economic growth, in the components of domestic investment (PMDN) and foreign investment (PMA). Ball also revealed that the realization of investment in Indonesia in the third quarter of 2020 increased by 8.9% compared to the realization of investment in the second quarter of 2020 which reached Rp191.9 trillion.

Another important fact is that the realization of investment in Indonesia in the third quarter of 2020 also increased by 1.6% compared to the realization of investment in the same period in the previous year, to be precise in the third quarter of 2019 amounting to Rp205.7 trillion.

Based on the data received, Bahlil expressed BKPM’s optimism in meeting the investment realization target in 2020 of Rp. 817.2 trillion, which currently has reached around 74.8% of the target. Supported by the enactment of the Job Creation Law and 153 companies interested in relocating to Indonesia, Bahlil is optimistic that the realization of investment in Indonesia in the fourth quarter of 2020 to 2021 will continue to increase.

Domestic Direct Investment realization

The realization of PMDN in the third quarter of 2020 recorded quite good results, even though the value was recorded to be slightly below the realization of PMA. BKPM recorded a realization of PMDN of IDR 102.9 trillion, which was an increase of 2.2% compared to the same period in 2019. From the data published by BKPM, there were 5 business sectors with the largest realization of domestic investment in the third quarter of 2020.

The Construction sector managed to occupy the top position with a realized investment value of Rp. 23 trillion, followed by the Transportation, Warehouse, and Telecommunication sector which earned Rp. 17.7 trillion. Furthermore, there is the Housing, Industrial Estate, and Offices sector with a realized investment value of Rp. 12.6 trillion.

The Electricity, Gas, and Water sectors collected IDR 11.2 trillion. In the fifth position is the Chemical and Pharmaceutical Industry sector with a total realized investment value of Rp7.5 trillion. When viewed from the location of distribution, the project locations with the largest realization of PMDN investment in the third quarter of 2020 are sequentially located in Banten, Riau, West Java, East Kalimantan, and East Java.

FDI investment realization

In addition to increasing investment realization in Indonesia in the third quarter of 2020, Bahlil also announced an increase in the realization of FDI which now reached Rp106.1 trillion. This means that there is an increase of 1.1% when compared to the realization of FDI investment in the same period in 2019 which reached Rp105 trillion.

According to BKPM data, there are five business sectors with the largest realization of FDI investment during the third quarter of 2020. The five sectors are the Basic Metals, Metals, Non-Machinery, and Equipment Industry sectors which earned US$1.6 billion; the Transportation, Warehouse, and Telecommunications sector which raised US$1 billion; and the Electricity, Gas, and Water sector with a total realization of FDI investment of US$0.9 billion.

The next sector is the Housing, Industrial Estate, and Offices sector with the realization of FDI investment of US$ 0.6 billion; and closed by the Chemical and Pharmaceutical Industry sector which earned US$0.6 billion. From the data submitted, information is obtained that the realization of FDI investment in the sequence is mostly located in West Java, DKI Jakarta, North Maluku, Banten, and Kep. Riau. The five foreign countries with the largest realization of FDI investment in the third quarter of 2020 were Singapore, RR China, Japan, Hong Kong, and the Netherlands.

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