Investment Grows 7%, Indef Urges Focus on Accelerating Project Realisation

The Head of the Macroeconomics and Finance Centre at the Institute for Development of Economics and Finance (Indef), M Rizal Taufikurahman, views the investment realisation in the first semester of 2026 as an indication that Indonesia’s investment appeal remains quite well maintained amidst global economic uncertainty. According to a report from the Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM), investment realisation during that period reached Rp 1,010.7 trillion, or approximately 49.5 per cent of the annual target. “However, the challenge in the second semester is no longer attracting investment commitments, but ensuring that these investments are immediately realised into productive projects,” Rizal said in Jakarta on Saturday (18/7/2026). He therefore urged the government to accelerate project execution through licensing simplification, regulatory certainty, accelerated infrastructure development, and the resolution of various obstacles on the ground. “This means investment should not only be high in nominal terms, but must also become a driver of economic growth and increase national production capacity,” he stated. Rizal assessed that Indonesia’s investment climate has relatively good resilience because it is supported by a large domestic market, the downstreaming agenda, and maintained macroeconomic stability. However, investors in the second semester are expected to be more selective due to high global uncertainty, geopolitical tensions, and still-elevated funding costs. These conditions will likely cause investment to flow into sectors that offer profit certainty and high added value, such as mineral downstreaming, manufacturing, the digital economy, data centres, energy, and logistics. “Thus, policy consistency is a key factor for Indonesia to remain competitive compared to other investment destination countries in the region,” Rizal said. Investment realisation in the first semester of 2026 managed to absorb 1.44 million workers, a 15 per cent increase compared to the same period the previous year, according to Ministry records. Rizal assessed that the increase in job absorption is a positive development, but not yet sufficient to conclude that the investment is of high quality. “The measure of investment success is not only determined by the number of jobs created, but also by productivity, wage levels, technology transfer, workforce skill enhancement, and the magnitude of value added generated,” he said. For this reason, Rizal believes that investment policy orientation needs to shift from merely pursuing realisation figures to fostering investment that is more productive, inclusive, and sustainable, so as to strengthen national industrial competitiveness while improving public welfare.