Indonesian foreign direct investment (FDI) rose 18.9 percent to 66.7 trillion rupiah (some 6. 72 billion U.S. dollars) in the second quarter of 2013, slower than the 30.2 percent growth rate in the same period last year, Indonesian Investment Coordinating Board (BKPM) said here Tuesday.
The growth is driven mainly by capital inflow into mining, transportation and base chemical sectors, according to BKPM.
"The growth of FDI is indeed slow in the second quarter, as declines in commodity prices limited domestic exporters' earnings and delayed foreign investors' expansion plans," BKPM Chairman Muhamad Chatib Basri told reporters.
In the first three months of 2013, FDI of the largest economy in Southeast Asia grew 27.2 percent to 65.5 trillion rupiah (some 6.8 billion U.S. dollars). Last year, Indonesia's total FDI surged 26 percent to a record level of more than 20 billion U.S. dollars bolstered by upgrades to investment grade status by two rating agencies in late 2011 and early 2012 respectively.
Basri said BKPM only reached 48.5 percent of the yearly target of 272.6 trillion rupiah (some 27.5 billion U.S. dollars) of FDI, and he is confident the target can be achieved in the second half of this year.
Powered by robust domestic demand and strong foreign investment rather than exports, Indonesia has achieved an annual growth rate of more than six percent in four of the last five years, and the Indonesian central bank expected the country's economy to expand by 5.8 percent to 6.2 percent this year./.