Purbaya Visits Major US Investors: Will It Successfully Bring Them to Indonesia Soon?

The government claims that foreign investors will soon inject significant capital into the country. This optimism was previously expressed by Finance Minister Purbaya Yudhi Sadewa following his meetings with major US investors during the International Monetary Fund (IMF) Spring Meetings in Washington DC, United States, this week. However, is it true that foreign investors are ready to invest large amounts of capital in Indonesia? Several economists assess that the reality on the ground does not yet fully align with the government’s optimism. Foreign investors still view Indonesia as an attractive market, but they are not fully confident to enter aggressively. Senior researcher at the Department of Economics, Center for Strategic and International Studies (CSIS), Deni Friawan, explained that foreign investors’ perception of Indonesia is still positive. However, this positive sentiment has not automatically translated into large capital flows. “So if it’s said to still be positive, still interested in Indonesia as stated by the Minister, yes. But what it means by still positive is that currently, it doesn’t mean there is a large influx of foreign funds into Indonesia yet, not like that,” Deni told CNBC Indonesia, quoted on Friday (17/4/2026). He explained that foreign investors are currently tending towards a wait-and-see position. They are still assessing how strong and credible the Indonesian government’s policies are, especially in facing fiscal challenges and global volatility. According to Deni, Indonesia remains considered attractive due to its promising growth potential. However, investor confidence has not fully recovered. Investor confidence can be seen from several market indicators, such as capital inflows, yields on Government Securities (SBN), credit default swaps (CDS), and foreign direct investment (FDI). Deni exemplified that foreign capital flows in the stock market were high in January, but after that, there was a significant outflow. Meanwhile, the returning funds have not entered as much as in previous periods. For information, Bank Indonesia (BI) recorded that during the trading period of 12-14 January 2025, foreign investors recorded a net selling action (net outflow) of Rp7.71 trillion. In line with this dynamic, Indonesia’s risk indicators also rose. Indonesia’s 5-year Credit Default Swap (CDS) premium as of 14 January 2026 was recorded at 71.43 basis points (bps), up from 69.31 bps on 9 January 2026. This increase indicates that global investors are becoming more cautious at the start of the year, although Indonesia’s CDS level remains relatively stable. “The CDS also rose from the previous up to 75 basis points. Again, this shows increasing risk. But it doesn’t mean foreign investors are really exiting. They are waiting for inflows, but most are still waiting to see how Indonesia’s policies continue. FDI is also not booming yet. There are inflows, but not as booming as in previous years,” he said. On the other hand, Head of Center for Macroeconomics and Finance at INDEF, M. Rizal Taufikurahman, assessed that foreign investors’ perception of Indonesia currently is not entirely or as positive as the government’s narrative. Fundamentals are still maintained with growth around 5% and a relatively safe debt ratio, but market indicators show increasing caution. The decline in foreign ownership of SBN to around 12% and pressure on the rupiah reflect that investors are still entering, but with a higher risk premium. “So, Indonesia’s position now is not ‘highly trusted’, but still attractive, yet no longer unconditional,” Rizal told CNBC Indonesia, quoted on Friday (17/4/2026). Rizal assessed that the main factor determining investor interest is no longer economic growth, but policy credibility and regulatory certainty. 5% growth is already considered a baseline. What investors are concerned about is the fiscal direction, policy consistency, and exchange rate stability. “When there is a perception that policies could change or fiscal becomes looser without clear financing, investors immediately raise the risk premium,” he said. Global volatility also has great potential to accelerate changes in investor perceptions. According to him, with high global interest rates, a strong dollar, and geopolitical tensions, emerging markets like Indonesia are very vulnerable to capital flow reversals. “Especially if domestic factors are not fully solid, then external shocks can quickly change sentiment from wait-and-see to risk-off,” he said. “What the government needs to fix is not just communication, but the credibility of the policies themselves. Fiscal discipline must be maintained consistently, policy direction must be clear and not changeable, and legal certainty needs to be strengthened,” Rizal emphasised.