Indonesia: FDI flows impacted by coronavirus in Q1 – UOB
|Economist Enrico Tanuwidjaja at UOB Group and Haris Handy reviewed the recent figures of the Foreign Direct Investment (FDI) in the country.
Key Quotes
“Indonesia’s direct investment slowed by 8.0% y/y (to IDR 2010.7tr) in 1Q20 vis-à-vis 12.0% growth seen in the previous quarter. Despite still growing in 1Q20, the trend might reverse for the rest of the year as investors delayed investment decisions due to the concerns surrounding the coronavirus (COVID-19) pandemic.”
“Singapore remained the largest foreign investor in Indonesia, with investment valued at USD 2.7bn for 3,006 projects, followed by China at USD 1.3bn for 650 projects, and Hong Kong at USD 0.6bn for 554 projects.”
“Going forward, we are cautiously optimistic that Indonesia will be able to attract much-needed longer-term investment in the country, after the pandemic is over, given the resilient of domestic economy and prudent fiscal spending. Nevertheless, continuous reforms and policy actions, as well as better ground implementation needs to be ensured to in order to achieve lower perception of risk, higher and stickier investment in the future.”
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