Indonesia’s Minister of Finance, Sri Mulyani Indrawati, announced a significant increase in investment, with both Domestic Direct Investment (PMDN) and Foreign Direct Investment (PMA) more than doubling since Q1 2020. This surge underscores Indonesia's strong post-COVID-19 recovery, with quarterly investment rising from IDR 211 trillion in Q1 2020 to IDR 428 trillion in Q2 2024. The annual growth rate stands at a stable 4.4% year-on-year (YoY). Sri Mulyani highlighted that this growth trend, while promising, still has room for acceleration to further boost economic development. The increase is driven not only by PMA and PMDN but also by strong credit growth.
As of June 2024, investment credit grew by 11.5% YoY, and working capital credit increased by 10.9% YoY. Overall, total banking credit growth matched the 11.5% YoY increase. This "double-digit" growth from the banking sector, along with PMA and PMDN, is contributing to capital investment that is fueling stronger economic expansion. Minister of Investment and Head of the Investment Coordinating Board (BKPM), Bahlil Lahadalia, added that the Ministry has set an ambitious investment target for 2025, ranging between IDR 1,850 trillion and IDR 1,900 trillion, an increase from the 2024 target of IDR 1,650 trillion set by President Joko Widodo. For 2024, the investment realization is projected to reach IDR 1,239.3 trillion. These figures reflect sustained optimism about Indonesia's investment growth, underscoring the country's economic potential for future exploration.
