Thu, 19 Nov 2009
Jakarta (ANTARA News) - Foreign investment inflows in Indonesia in the third quarter of 2009 plunged 87 percent to US$435 million from the same period last year.

The slump made net foreign direct investment (FDI) suffer a deficit of US$70 million, thereby posing a challenge to the government to attract long-term investment in the future, Citigroup analyst Johanna Chua said in a market analysis on Wednesday.

According to a Bank Indonesia (central bank) report, foreign investment inflows in the first nine months of 2009 showed a downward trend.

Foreign investment inflows in the first quarter of 2009 reached US$2.094 billion and fell 40 percent to US$1.275 billion in the second quarter and further plummeted by 87 percent to US$435 million in the third quarter.

The foreign investment inflows in the third quarter of 2009 were the lowest in the past two years. Foreign investment reached more than US$1 billion in each quarter since 2007.

Likewise, Indonesian investment abroad also fell. But their plunge was not as fast as that of foreign investment inflows in the country.

Indonesian investment abroad reached US$1.251 billion in the first quarter of 2009 and fell to US$1.047 billion in the second quarter and further plunged to US$505 million in the third quarter.

The Citigroup analyst said even though Indonesia`s balance of payments in the third quarter of 2009 showed a surplus of US$3.546 billion compared to the same period a year earlier, its performance was much fueled by short-term investment (portfolio investment).

Portfolio investment climbed to US$1.859 billion in the first quarter of 2009 and slightly increased to US$1.959 billion in the second quarter and jumped to US$3.403 billion in the third quarter.

Consequently, Indonesia`s business outlook and performance would be very much influenced by the government`s effort to attract long-term investment, Johana said.(*)



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