Direct investment hit a 40-year record high of Rp125.94 trillion ($13.99 billion) in the first nine months of 2007, the Capital Investment Coordination Board (BKPM) Asia Pulse reported Wednesday (19/12/07).
The statement marked a high note for what for the business world was the effective end of 2007,
"Direct Investment this year is the highest since 1967 when the capital investment law was put into force," BKPM Chief M. Lutfi said Tuesday.
The figure represented a 169.02% rise compared to last year when it was Rp74.51 trillion ($8.28 billion), he said, adding it is expected to grow by 15.2% in 2008 or faster than 12.54% as projected by the Finance Ministry.
Miranda Goeltom, Senior Deputy Governor at the central bank, was also upbeat on the investment prospects for 2008. She said investments totaling Rp1,165 trillion ($123.5 billion) would be required to meet the economic growth target of more than 6%.
Banks would have bigger opportunities to finance investment, she noted. Meanwhile, a Bank Indonesia official said the bank would be introducing changes to regulations in March which would reduce administrative workloads in the banking sector, allowing banks to improve customer services and boost lending.
Goeltom also praised the performance of the banking sector, where she said the loan to deposit ratio was at 70%, while non-performing loans remained low.
She said economic growth in 2008 could be better than that in 2007 while inflation was expected to reach between 6.3% 6.5% by the end of this year.
In another major announcement to mark the end of the year, the president director of PT Medco Energi Internasional said the company would combine with Mitsubishi Corp. and state oil firm Pertamina to build an LNG plant in Sulawesi. No cost was put on the project.
Hilmi Panigoro said Medco would take a 20% stake in the LNG plant, while Mitsubishi would hold 51% and Pertamina 29%.
In the export sector, non-oil and -gas exports are projected to grow 14-18% in 2008 from $93 billion estimated for this year, the Trade Ministry said in a statement posted on its website, Thomson Financial reported.
The ministry said key non-oil and gas commodities such as coal, nickel, crude palm oil and rubber, which have underpinned export growth this year, will continue to be the main drivers of growth.
In the first ten months of this year, the country's non-oil and gas exports rose 17.3% to $75.91 billion compared to the same period of last year, while oil and gas exports declined 1.2% to $17.36 billion.
CPO was the biggest non-oil and gas commodity with an export value of $7.78 billion in the first ten months, up from $4.90 billion in the same period last year. The increase was supported by a sharp rise in CPO prices.
The Indonesian Stock Exchange ended the week with a slight lift, up 0.4% on the Wednesday before closing until after Christmas. The Jakarta composite index closed at 2,657.98.
The main index had retreated more than 5% from its all-time high of 2,810.96 set on December 11.
Shipping company PT Berlian Laju Tanker shares rose Rp125 to 2,600 after the company's shareholders approved the acquisition of US shipping company Chembulk Tankers LLC for $850 million, a move that propels the company into the international arena as the third largest stainless steel chemical tanker operator in the world in terms of capacity and number of ships.