FDI in Indonesia rises 15pc in three months

JAKARTA, Oct 21 (Bloomberg): Indonesia's foreign and domestic investments increased last quarter as companies from Singapore and the US boosted spending. Investment rose 15.3 per cent to 65.4 trillion rupiah (S$9.4 billion) in the three months ended Sept 30 from a year earlier, Azhar Lubis, deputy chairman of the Investment Coordinating Board, said in Jakarta yesterday. The country attracted 181 trillion rupiah in the nine months through September, a 21-per cent increase from a year earlier, he said. President Susilo Bambang Yudhoyono aims to expand South-east Asia's largest economy at an annual average rate of 6.6 per cent through the remainder of his term ending in 2014 by creating jobs and developing the country's infrastructure. The central bank this month lowered its benchmark interest rate for the first time in more than two years to spur domestic demand as the global recovery weakens. 'Amid a volatile global economy, full of uncertainties in the US and Europe, we still manage to post growth in investment realisation,' Mr Lubis said. 'We are optimistic we can reach total investments of 240 trillion rupiah this year and it's possible we can reach more than that.' The investment board expects total investments to grow 15 per cent in 2012, he said. Domestic investment rose 14.5 per cent to 19 trillion rupiah during the July to September period, led by foodstuff and plantation projects and spending on electricity, gas and water, the agency said. Foreign direct investment climbed 15.7 per cent to 46.4 trillion rupiah in the same period, aided by transportation, telecommunication and mining. Singapore was the biggest contributor to third-quarter foreign investment, accounting for US$1.3 billion. Investment from the US totalled US$0.5 billion. The US$707 billion economy is forecast to expand 6.6 per cent this year, with growth easing to 6.5 per cent in 2012, Bank Indonesia Governor Darmin Nasution said on October 11. Analysts expect Indonesia to remain attractive to investors next year as as the economy is expected to again grow more than 6 per cent.