Apindo: Slowing Investment Growth Will Not Significantly Impact Economy
Jakarta — The Indonesian Employers' Association (Apindo) has assessed that the slowdown in investment growth in Indonesia during the first quarter of 2025 will not significantly impact economic growth, as investment's contribution to gross domestic product (GDP) remains lower than that of household consumption.
The Ministry of Investment and Downstreaming/BKPM recorded that investment realisation in Q1 2025 grew 15.9% year-on-year, reaching Rp465.2 trillion. While the nominal value increased, the percentage growth rate declined from the same period the previous year, which saw 22.1% year-on-year growth worth Rp401.5 trillion.
According to Apindo Deputy Chairman for Public Policy Chandra Wahjudi, investment is indeed one of the main drivers of GDP, meaning a decline in its growth rate can affect economic growth. "But for Indonesia, it will not have a significant impact because investment's share of GDP is still small compared to the consumption share," he said on Tuesday (29/4).
Based on Central Statistics Agency (BPS) data, investment's contribution to Indonesia's GDP structure was only around 30% in 2024, while the largest contributor was household consumption at 54%. Over the past five years, the trend has actually been declining — from 32.57% in 2014 to 32.33% in 2019, and further down to 29.33% in 2023.
"This slowdown can be attributed to several factors, including persistently high global uncertainty and slowing global economic growth," he said.
Amid the escalating tariff war between the United States and its trading partners, including Indonesia, Chandra still sees opportunities to attract Chinese industrial investment into the country, especially as the US-China trade war shows no signs of abating. However, he said Indonesia must urgently address various bureaucratic barriers, logistics infrastructure gaps, and regulatory uncertainty to ensure its product competitiveness does not fall behind other ASEAN nations such as Malaysia or Vietnam.
"The issue of thuggery has been going on for a long time. Although it has indeed become more prevalent recently. Legal certainty will certainly be one of the important factors in investing," he said.
He also highlighted BKPM's figures showing that Q1 2025 investment realisation absorbed 594,104 workers, an 8.5% annual increase, demonstrating investment's positive impact on job creation. "To ensure inclusivity, investment needs to be spread more evenly across labour-intensive sectors and regions outside Java," he said.
Investment Minister and BKPM Head Rosan Roeslani reported that investment realisation reached Rp465.2 trillion during January–March 2025, growing 15.9% year-on-year. He declined to comment on the growth slowdown but highlighted several concerns. The investment realisation also rose 2.7% quarter-on-quarter.
"This is one very good indicator amid rising geopolitical and geo-economic tensions. Thankfully, we see the appetite of both domestic and foreign investors to invest in Indonesia continuing to increase," he said.
Rosan stated his office wishes to continue improving the domestic investment climate. "How we can provide greater certainty in terms of timeframes and licensing," he explained at a press conference at the BKPM office.
He also raised the issue of thuggery disrupting the investment climate, saying he had received complaints from investors. "We are coordinating with the National Police Chief and regional governments to ensure these things do not happen, as they have a negative impact on incoming investment," he said.
Previously, the construction of Chinese electric vehicle manufacturer BYD's factory at the Subang Smartpolitan Industrial Estate in West Java was disrupted by thuggery disguised as activities by civil society organisations. Vice Chairman of the People's Consultative Assembly (MPR) Eddy Soeparno highlighted the issue during a working visit to BYD's assembly centre in Shenzhen, China. He stressed that such thuggery could drive investors away due to a lack of security guarantees.
Meanwhile, police from the Serang Police Station in Banten Province detained 23 perpetrators of illegal levies across several industrial areas in the district. Serang Police Chief AKBP Condro Sasongko said the suspects were apprehended during an anti-extortion and anti-thuggery operation conducted at several industrial locations in the East Serang area on Sunday (27/4) evening.
The 23 suspects were detained from various locations, including intersections along the Serang-Jakarta arterial road, the parking area of PT Indah Kiat Pulp and Paper, the entrance gate of PT Univenus, and the Modern Cikande Industrial Estate gate. Officers seized Rp2 million in extortion money and a bundle of parking tickets as evidence.
Condro expressed hope that after receiving guidance, the detained individuals would change their behaviour and seek legitimate employment. "We also advised them to look for work immediately, so they can earn a steady income to support their families," he said.
The Ministry of Investment and Downstreaming/BKPM recorded that investment realisation in Q1 2025 grew 15.9% year-on-year, reaching Rp465.2 trillion. While the nominal value increased, the percentage growth rate declined from the same period the previous year, which saw 22.1% year-on-year growth worth Rp401.5 trillion.
According to Apindo Deputy Chairman for Public Policy Chandra Wahjudi, investment is indeed one of the main drivers of GDP, meaning a decline in its growth rate can affect economic growth. "But for Indonesia, it will not have a significant impact because investment's share of GDP is still small compared to the consumption share," he said on Tuesday (29/4).
Based on Central Statistics Agency (BPS) data, investment's contribution to Indonesia's GDP structure was only around 30% in 2024, while the largest contributor was household consumption at 54%. Over the past five years, the trend has actually been declining — from 32.57% in 2014 to 32.33% in 2019, and further down to 29.33% in 2023.
"This slowdown can be attributed to several factors, including persistently high global uncertainty and slowing global economic growth," he said.
Amid the escalating tariff war between the United States and its trading partners, including Indonesia, Chandra still sees opportunities to attract Chinese industrial investment into the country, especially as the US-China trade war shows no signs of abating. However, he said Indonesia must urgently address various bureaucratic barriers, logistics infrastructure gaps, and regulatory uncertainty to ensure its product competitiveness does not fall behind other ASEAN nations such as Malaysia or Vietnam.
"The issue of thuggery has been going on for a long time. Although it has indeed become more prevalent recently. Legal certainty will certainly be one of the important factors in investing," he said.
He also highlighted BKPM's figures showing that Q1 2025 investment realisation absorbed 594,104 workers, an 8.5% annual increase, demonstrating investment's positive impact on job creation. "To ensure inclusivity, investment needs to be spread more evenly across labour-intensive sectors and regions outside Java," he said.
Investment Minister and BKPM Head Rosan Roeslani reported that investment realisation reached Rp465.2 trillion during January–March 2025, growing 15.9% year-on-year. He declined to comment on the growth slowdown but highlighted several concerns. The investment realisation also rose 2.7% quarter-on-quarter.
"This is one very good indicator amid rising geopolitical and geo-economic tensions. Thankfully, we see the appetite of both domestic and foreign investors to invest in Indonesia continuing to increase," he said.
Rosan stated his office wishes to continue improving the domestic investment climate. "How we can provide greater certainty in terms of timeframes and licensing," he explained at a press conference at the BKPM office.
He also raised the issue of thuggery disrupting the investment climate, saying he had received complaints from investors. "We are coordinating with the National Police Chief and regional governments to ensure these things do not happen, as they have a negative impact on incoming investment," he said.
Previously, the construction of Chinese electric vehicle manufacturer BYD's factory at the Subang Smartpolitan Industrial Estate in West Java was disrupted by thuggery disguised as activities by civil society organisations. Vice Chairman of the People's Consultative Assembly (MPR) Eddy Soeparno highlighted the issue during a working visit to BYD's assembly centre in Shenzhen, China. He stressed that such thuggery could drive investors away due to a lack of security guarantees.
Meanwhile, police from the Serang Police Station in Banten Province detained 23 perpetrators of illegal levies across several industrial areas in the district. Serang Police Chief AKBP Condro Sasongko said the suspects were apprehended during an anti-extortion and anti-thuggery operation conducted at several industrial locations in the East Serang area on Sunday (27/4) evening.
The 23 suspects were detained from various locations, including intersections along the Serang-Jakarta arterial road, the parking area of PT Indah Kiat Pulp and Paper, the entrance gate of PT Univenus, and the Modern Cikande Industrial Estate gate. Officers seized Rp2 million in extortion money and a bundle of parking tickets as evidence.
Condro expressed hope that after receiving guidance, the detained individuals would change their behaviour and seek legitimate employment. "We also advised them to look for work immediately, so they can earn a steady income to support their families," he said.