Indonesia’s Third Quarter Sees Robust Investment Growth, Led by Downstream Diversification

Indonesia has witnessed a significant surge in investment during the third quarter of 2023, reaching Rp374.4 trillion, marking a 7.0% increase from the previous quarter and a substantial 21.6% growth compared to the same period in 2022.

Key Highlights:

  1. Overall Investment Realization: From January to September 2023, the country achieved a total investment realization of Rp1,053.1 trillion, reflecting an 18.0% increase from the same period in 2022.
  2. Contribution of Downstream Diversification: Investments in downstream diversification reached Rp266 trillion, constituting 25.3% of the total investment during this period.
  3. Sectoral Breakdown: The breakdown of investments in downstream diversification covers five key sectors:
    • Mineral Sector (Rp151.7 Trillion): Primarily nickel, bauxite, and copper industries.
    • Agricultural Sector (Rp39.5 Trillion): Mainly from the palm oil and oleochemical industries.
    • Forestry Sector (Rp34.8 Trillion): Driven by the pulp and paper industry.
    • Oil and Gas Sector (Rp31.6 Trillion): Including investments in petrochemicals.
    • Electric Vehicle Ecosystem (Rp8.4 Trillion): Focused on the production of electric vehicle batteries.
  4. Quarterly Breakdown: In the third quarter of 2023, downstream diversification investments totaled Rp114.6 trillion, emphasizing sectors such as minerals, forestry, oil and gas, agriculture, and the electric vehicle ecosystem.
  5. Foreign and Domestic Investments: Foreign direct investment (PMA) saw a remarkable growth of 16.2% in the third quarter, reaching Rp196.2 trillion. Meanwhile, domestic investment (PMDN) reached Rp178.2 trillion, growing by 28.2% compared to the same period last year.
  6. Job Creation: The investment realization in the third quarter absorbed 516,467 Indonesian workers, contributing to a total of 1,365,648 jobs from January to September 2023. The Ministry of Investment emphasizes a balance between investment realization and job creation.
  7. Regional Distribution: Investments outside Java surpassed those within the island during the third quarter, reaching Rp190.9 trillion (51.0%). This represents a 14.7% increase compared to the same quarter in 2022. North Maluku emerged as the fifth-largest contributor among provinces.
  8. National-Centric Development: Minister of Investment Bahlil Lahadalia emphasizes a shift towards Indonesia-centric development, ensuring that growth is not only concentrated in Java but extends to the entire nation.

Indonesia’s investment landscape showcases resilience and continued focus on diversification, setting the stage for sustainable economic development.