Indonesian Foreign Investment Tipped To Plummet 58%

The Indoneisan Finance Minister has forecast that foreign direct investment for 2009 will be $6.2 billion, less than half of last year’s total of $14.87 billion, as companies remain cautious about expansion plans amid the global downturn.

Overall investment in 2009 will be supported by [foreign direct investment] to the tune of $4.5 billion in the first half, but this will drop to $1.7 billion in the second half. Last year, the country recorded total actual direct investment — domestic and foreign — of Rp 154 trillion ($17.13 billion), 20 percent higher than in 2007, data from the Web site of the Investment Coordinating Board (BKPM).

The transportation, warehousing and communications sectors led the way, attracting $1.21 billion in investment. The Indonesian Chamber of Commerce and Industry (Kadin), said it is pessimistic that the government’s Rp 73.3 trillion economic stimulus package would improve the investment climate, especially among foreign players, given the fundamental state of the global economy.