JAKARTA, May 2 (Xinhua) -- Investment activity in Indonesia has maintained a steady pace and is expected to remain resilient throughout the year, amid challenges posed by U.S. tariff policies, according to a market analysis released Friday.
A macroeconomic brief by Bank Mandiri on Indonesia's direct investment projected the country's economic growth to stay robust in 2025, ranging between 4.83 percent and 5.03 percent. Economic stability was anticipated to bolster investor confidence and attract greater inflows of foreign direct investment (FDI) into Southeast Asia's largest economy.
"We expect direct investment to remain strong this year, supporting Indonesia's economy in maintaining its growth trajectory of 4.83 percent to 5.03 percent," said Bank Mandiri Chief Economist Andry Asmoro.
According to the data, investment realization in the first quarter of 2025 reached 465.2 trillion rupiahs, marking a 15.9 percent increase compared to the same period last year. FDI grew 12.7 percent year-on-year, highlighting sustained interest from global investors.
The investment surge led to the creation of 594,104 jobs in the first quarter alone. On average, every 1 trillion rupiahs in direct investment absorbed 1,300 workers, a significant improvement and the first time in a decade that job absorption surpassed 1,000 per trillion rupiahs.
"This is the highest investment-to-labor absorption ratio in the past 10 years," Asmoro added.
Despite the strong start, Asmoro cautioned that Indonesia must navigate a range of global and domestic challenges that could affect investor sentiment. Among them are shifting U.S. tariff policies and increasing competition among ASEAN countries to attract investment.
To stay competitive, Asmoro emphasized the importance of expanding international cooperation and enacting policy reforms to sustain Indonesia's investment competitiveness and prevent capital from relocating to other countries. (1 U.S. dollar equals 16,410 rupiahs)
