Indonesia's inward foreign direct investment rockets to record US$23b

Check out where the investment focused on.

According to BBVA Research, Indonesia’s inward foreign direct investment surged to a record US$23bn in 2012, after the country’s investment board reported that direct investment rose by 22.9% y/y to US$5.9bn in the fourth quarter.

The investment largely focused on the mining, transport, and chemicals sectors. With interest in Indonesia’s domestic demand story still strong, we think FDI will continue to grow in 2013, despite some signs of increasing nationalistic policies that has raised concerns among some investors.

"Indonesia is in need of FDI to help with critical infrastructure upgrades, as underscored by recent flooding in Jakarta which some estimates put total economic losses incurred at north of US$100mn," BBVA said.