FDI in January fell by 24 percent: BKPM
FDI in January fell by 24 percent: BKPM
The Jakarta Post, Jakarta
Foreign direct investment (FDI) flows into the country remained
weak as FDI approvals in January of this year dropped by nearly
24 percent compared to the same period last year, according to
the latest data from the Investment Coordinating Board (BKPM).
BKPM said on Monday that FDI approvals during the month fell
to US$264.4 million from $324.2 million.
It said that the number of projects plunged by 50 percent to
49 projects from 99 projects.
The agency data was quoted by detik.com as saying that
domestic investment activities were also weak as the number of
approved projects fell to seven from 13 in January of last year,
although the total investment slightly increased to Rp 1.044
trillion (124.28 million) from Rp 1.033 trillion.
During the past few years, the investment flow into the
country has been slowing due to a combination of global
uncertainty and problems at home including legal uncertainty,
security problems, labor conflict, and poor implementation of the
regional autonomy law. The strong attraction of China and other
neighboring countries offering cheaper labor and stable political
conditions have even prompted some investors to shift their
business operations.
The hard gained macroeconomic stability as reflected in the
strengthening of the rupiah, benign inflation and falling
interest rates have not translated into stronger investment
activities.
Some analysts have said that most investors would likely to
stay on the sidelines this year due to the upcoming seven-month
election period.
The weak investment flow has affected the country's economy
which has been growing at a meager rate of less than 4 percent
during the past couple of years as growth has been largely driven
by domestic consumption while exports and investments remained
slow.
Economists have said that the economy needs to return to its
pre-crisis growth level of between 6 percent and 7 percent in
order to be able to provide enough jobs for the millions of
unemployed.
Elsewhere, BKPM said that the food sector had attracted the
most attention from foreign investors during the month of
January, followed by the construction, and chemical and pharmacy
industries.
Banten Province was the most favored investment place
attracting some $101.7 million in approved FDI. In second place
was Gorontalo, which saw an FDI figure of $85.5 million. The
densely populated West Java province was in third place with FDI
figure of $21.2 million.
England was the largest source of the FDI in January, followed
by Brazil and Japan.