According to recent data released by the Indonesian Investment Coordinating Board, or the BKPM, Indonesia received US$43 billion in foreign investment in 2022, the highest in the country’s history and an increase of 44 percent from 2021. When combined with domestic investments, Indonesia saw 1,207 trillion rupiah (US$80 billion) in investments, an increase of 34 percent from the previous year.
Foreign investment in Indonesia in 2022 was dominated by the metal mining and mining sectors, which saw more than US$16 billion in FDI combined.
For 2023, the government is expecting 1,400 trillion rupiah (US$92 billion) in combined foreign and domestic investments, and 1,650 trillion rupiah (US$108 billion) in 2024.
Top FDI sources in 2022
The top five sources of foreign investment in Indonesia are as follows:
- Singapore – US$13.3 billion;
- China – US$8.2 billion;
- Hong Kong – US$5.5 billion;
- Japan – US$3.6 billion; and
- Malaysia – US$3.3 billion.
Notable sectors that attracted major foreign investment
Indonesia’s basic metal industry tops FDI received in 2022
Indonesia’s basic metal industry sector received the most foreign investment in 2022. Data from the BKPM showed that the sector saw US$11 billion worth of FDI or some 24 percent of the total FDI the country received in 2022.
The country is seeking to exploit its abundance of mineral resources to develop its downstream mineral industry, particularly for nickel. Indonesia is home to the world’s largest nickel reserves, which are at an estimated 22 million tons, and the country is leveraging those reserves as well as other minerals to attract FDI in the development of local smelters. As such, the export value of processed nickel contributed significantly to government revenues in 2022, reaching US$30 billion; a huge increase from just US$1 billion in 2015.