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Indonesian Economic Recovery Increases Foreign Investment

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The Indonesian economy has entered a recovery path from the impact of the Covid-19 pandemic, making it the right time for foreign investors to invest in Indonesia. This was affirmed by Governor of Bank Indonesia (BI), Perry Warjiyo during the Indonesia Investment Forum 2021 held by the Indonesian Embassy in London, England more recently. He said there were three reasons that attracted foreign investors to Indonesia. The first is optimism for economic recovery. This year, the Indonesian economy is predicted to grow positively in the range of 4.1-5.1%. The sources of economic growth this year are strong export performance, increased private investment and consumption, and continued monetary and fiscal stimulus. In addition, the inflation rate and financial system stability will also be maintained. Second reason is the establishment of close policy coordination among the government, central bank and related authorities that gave birth to fiscal and monetary policies in line with structural reforms to create jobs and spur investment. The third one is the digitalization of the economy that has accelerated very quickly amid the Covid-19 pandemic.

Meanwhile, data from the Investment Coordinating Board show that the realization of investment that entered Indonesia in the first quarter of 2021, was recorded at around 25.66 percent of this year's investment target, consisting  of domestic and foreign investments.

Based on the reports, the largest foreign investment for the January-March 2021 period includes the Motor Vehicle Industry and Other Transportation Equipment sector, Food and Beverage Industry, Transportation, Warehouse and Telecommunication, Mining and the Non-ferrous Base Metal Manufacturing Industry with an investment realization value of US $ 1.8 billion.

The realization of foreign investment, which reached 50.8% of total investment, shows the growing world confidence in the investment climate and investment potential in Indonesia. According to Governor Perry Warjiyo, this occurred because of the cooperation of all parties who helped drive investment growth, especially amid the current Covid-19 pandemic. All elements of society must participate to continue to reduce the rate of spread of the Covid-19 pandemic and prevent the explosion of the second wave from occurring in Indonesia. If it fails, it is possible, the efforts that have been made to attract foreign investors into the country could be hampered.

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