Gov’t Releases Q3 Investment Realization Report
Ministry of Investment/Indonesian Investment Coordinating Board (BKPM) has released the investment realization report for the third quarter of 2021.
The report states that the investment realization from July to September 2021 reached Rp 216.7 trillion, 3.7 percent higher than that of last year’s third quarter with Rp 209 trillion.
“An increasing positivity rate of COVID-19 cases from last July to mid-August has enforced the Government to restrict economic activities, especially in the island of Java, and has slowed down investment activities. However, thanks to the Government [COVID-19] handling, and after the decreasing positivity rate of COVID-19 cases in mid-August onward, the real economic activities continued to improve and the investors can accelerate construction or project development,” Minister of Investment/Chairperson of the BKPM Bahlil Lahadalia said as quoted by the official website of the Ministry on Thursday (28/10).
The BKPM data shows that the realization of domestic direct investment (PMDN) in the third quarter of 2021 was Rp 113.5 trillion or 52.4 percent of the total investment realization, with the absorption of 133,972 Indonesian workers. There was a 10.3 percent increase in the realization of domestic investment in the third quarter of 2021 compared to the same period in 2020. The largest contributors to the domestic investment were housing, industrial zones and offices, with the total investment of Rp 20.6 trillion.
In the meantime, the realization of foreign direct investment (PMA) in the third quarter of 2021 reached Rp 103.2 trillion or 47.6 percent of the total realization of investment, with the absorption of 154,715 Indonesian workers. Compared to the same period in 2020, there was a slight decrease of 2.7 percent, from Rp 106.1 trillion to Rp 103.2 trillion. The largest contributors to the realization of the foreign direct investment were basic metal, metal goods, and non-machinery and the equipment industries, with the investment of Rp 21.5 trillion.
Based on the distribution, the realization of investment in the island of Java reached Rp 104.2 trillion (48.1 percent), while the investment outside the island of Java was Rp 112.5 trillion (51.9 percent). The investment realization outside the island of Java was higher due to the implementation of Level 3 and Level 4 activity restrictions (PPKM) in the islands of Java and Bali, while investment realization outside Java and Bali continued to grow, especially in areas implementing Level 1 and Level 2 PPKM.
In the third quarter of 2021, there were several business entities which have started project construction, including in the sectors of data center services, lithium battery industry, automotive and its components, as well as food and beverages in West Java; footwear industry in Central Java; and other businesses in the processing industry and service support.
“Ministry of Investment/BKPM will support Indonesia’s goal to become the developed nation in 2045 by ensuring that investments for domestic industry and economic transformation can be realized,” Bahlil said.
For the record, cumulative investment realization from January to September 2021 was recorded at Rp 659.4 trillion or 73.3 percent of this year’s target of Rp 900 trillion investment. The investment realization consists of Rp 331.7 trillion foreign direct investment (50.3 percent) and Rp 327.7 trillion domestic direct investment (49.7 percent), with the absorption of 912,402 Indonesian workers (447,116 workers from foreign direct investment and 465,286 workers from domestic direct investment).
The largest sectors contributing to the foreign direct investment were basic metal industry, metal goods, non-machinery and the equipment with total investment of Rp 72.3 trillion (21.8 percent). For domestic direct investment, the largest contributors were housing, industrial zones, and offices, with the total investment of Rp 62.8 trillion (19.2 percent). The project location with the largest investment realization is West Java with foreign direct investment of Rp 61.9 trillion (18.7 percent) and domestic direct investment of Rp 45.3 trillion (13.8 percent), while the country with the largest investment is Singapore with the total investment of Rp 106.2 trillion (32.0 percent).
“I am optimistic that at the end of 2021 the economy and investment will rebound and President Jokowi’s investment realization target of Rp 900 trillion will be achieved,” Bahlil remarked. (PR of Ministry of Investment/UN) (RI/MUR)