BKPM Downgrades Forecast For 2009 Investment Growth
BKPM Downgrades Forecast For 2009 Investment Growth
by Dion Bisara & Muhamad Al Azhari
Nusa Dua, Bali. The National Coordinating Investment Board slashed its growth forecast for both foreign and local direct investment this year to 9 percent, down from 10.7 to 11.2 percent in its previous forecast, due to liquidity drying up in the global financial crisis.
On the sidelines of the Asian Development Bank’s annual meeting being held in Bali on Saturday, Muhammad Lutfi, the BKPM’s chairman, said it cut its forecast after it saw that the actual inflow of foreign direct investment (FDI) in April was quite low compared with the same period a year ago.
According to BKPM’s latest data, the country posted a minus 4.1 percent in growth of FDI in April based on a year-on-year calculation. According to data, actual FDI for April was recorded at $1.4 billion compared with $1.46 billion in the same period last year. Transportation, warehousing and communications contributed $1.21 billion to the total investment in April.
“April’s data showed some disruption,” Lutfi told reporters, adding that Indonesia has to compete with other emerging nations to attract the already thin liquidity in the global markets.
Lutfi said that despite slow FDI realization in April, Indonesia had secured $7 billion worth of FDI investment commitments in mining and the oil and gas sector this year, which he said would be realized between 2011-2012.
The commitments include one from one of the largest European nickel firms, which is investing as much as $4.6 billion in North Maluku and the Senoro-Donggi liquefied natural gas project, which has secured FDI commitment of about $1.8 billion. The rest would be from investors who plan to build a power plant in North Sumatra.
In a bid to make investment in the energy and the mining sectors more attractive, Lutfi said BKPM had recommended to the government that investors in these sectors should be given tax holiday incentives and offered some offtake agreements, or agreements in which the government would buy industrial output from these industries. In addition, guarantees for project financing was also needed, he said.
BKPM data showed that domestic investment realization in April jumped to Rp 1.51 trillion ($142 million) from Rp 680 billion in the same period last year.
In 2008, Indonesia posted a strong 43.8 percent growth in realization of foreign direct investment, with $14.87 billion worth of FDI recorded by the agency, up from $10.34 billion in the same period a year earlier.
by Dion Bisara & Muhamad Al Azhari
Nusa Dua, Bali. The National Coordinating Investment Board slashed its growth forecast for both foreign and local direct investment this year to 9 percent, down from 10.7 to 11.2 percent in its previous forecast, due to liquidity drying up in the global financial crisis.
On the sidelines of the Asian Development Bank’s annual meeting being held in Bali on Saturday, Muhammad Lutfi, the BKPM’s chairman, said it cut its forecast after it saw that the actual inflow of foreign direct investment (FDI) in April was quite low compared with the same period a year ago.
According to BKPM’s latest data, the country posted a minus 4.1 percent in growth of FDI in April based on a year-on-year calculation. According to data, actual FDI for April was recorded at $1.4 billion compared with $1.46 billion in the same period last year. Transportation, warehousing and communications contributed $1.21 billion to the total investment in April.
“April’s data showed some disruption,” Lutfi told reporters, adding that Indonesia has to compete with other emerging nations to attract the already thin liquidity in the global markets.
Lutfi said that despite slow FDI realization in April, Indonesia had secured $7 billion worth of FDI investment commitments in mining and the oil and gas sector this year, which he said would be realized between 2011-2012.
The commitments include one from one of the largest European nickel firms, which is investing as much as $4.6 billion in North Maluku and the Senoro-Donggi liquefied natural gas project, which has secured FDI commitment of about $1.8 billion. The rest would be from investors who plan to build a power plant in North Sumatra.
In a bid to make investment in the energy and the mining sectors more attractive, Lutfi said BKPM had recommended to the government that investors in these sectors should be given tax holiday incentives and offered some offtake agreements, or agreements in which the government would buy industrial output from these industries. In addition, guarantees for project financing was also needed, he said.
BKPM data showed that domestic investment realization in April jumped to Rp 1.51 trillion ($142 million) from Rp 680 billion in the same period last year.
In 2008, Indonesia posted a strong 43.8 percent growth in realization of foreign direct investment, with $14.87 billion worth of FDI recorded by the agency, up from $10.34 billion in the same period a year earlier.