In 2023, Indonesia experienced a significant growth in investment across various sectors, reflecting the country’s continued appeal to both domestic and international investors. The investment realization has surpassed expectations, marking a robust economic outlook. Here’s an extensive overview of the investment data for the year 2023.
Overall Investment Realization
The Ministry of Investment/BKPM reported an impressive total investment realization of IDR 1,418.9 trillion in 2023, exceeding the target set by the President of Indonesia by 1.3%, indicating a 101.3% achievement. This performance also overshadows the target outlined in the government's medium-term development plan by reaching 129.0%. The investment is divided into Foreign Direct Investment (FDI) and Domestic Direct Investment (DDI), with FDI accounting for IDR 743.9 trillion (52.4%) and DDI at IDR 674.9 trillion (47.6%).
Geographical Distribution
The distribution of investments in Indonesia showcases a balanced development between the Java region and areas outside Java. Java attracted IDR 688.1 trillion (48.5%) of the investments, while regions outside Java slightly led with IDR 730.8 trillion (51.5%). This geographical distribution underscores the country's efforts to promote equitable economic growth throughout the archipelago.
Investment by Origin of Country
Singapore remains the top investor in Indonesia, contributing USD 15.4 billion in 2023. It is followed by China with USD 7.4 billion and Hong Kong with USD 6.5 billion. Japan and Malaysia also feature in the top five, contributing USD 4.6 billion and USD 4.1 billion, respectively. While Singapore, China, and Hong Kong led the charge, Australia also made its mark in the Indonesian investment climate as Australia's investment in Indonesia rose into the 10th position, with a value of USD 545.19 Million from the previous year in 2022 where it placed in the 11th position with a value of USD 524.41.
Sectoral Distribution
Investments in Indonesia were dominated by the metal industry, excluding machinery and electronics, with IDR 200.3 trillion, or 14.1% of the total investments. The transportation, warehousing, and telecommunications sectors followed closely with IDR 159.8 trillion. The mining sector also showed significant investment figures, accounting for IDR 156.5 trillion.
Downstream Industry Investments
In the downstream sector, Indonesia has focused on value-added industries to enhance the country's economic complexity. The mineral sector saw investments of IDR 216.9 trillion, while the oil and gas sector received IDR 46.3 trillion. Remarkably, investments in the electric vehicle ecosystem, including battery production for electric vehicles, have reached IDR 9.7 trillion, signifying the country's move towards sustainable and modern transportation solutions. All in all, the total investment realization in the downstreaming sector reached IDR 375.4 trillion which accounts for 26.5% of the total investment realization in January-December 2023.
Impact on Employment
The investment growth in Indonesia has also translated into job creation. Throughout January to December 2023, investments have generated employment for 1,823,543 people, indicating the substantial impact of investment on the nation's labor market and overall economic development.
The year 2023 stands as a testament to Indonesia's growing economy and its attractiveness as an investment destination. With a strategic spread of investments across various regions and sectors, the country is poised to continue this growth trajectory, fostering economic development and providing ample employment opportunities. The government's focus on promoting sustainable industries and value-added commodities also indicates a forward-looking approach to economic planning. The reported figures and trends provide a clear indication of Indonesia's potential and its strategic position in the global economic landscape.