Q4 FDI Growth Slows in Southeast Asia’s Largest Economy Despite Nickel Industry Boom


  • Growth in the fourth quarter slowed drastically to 5.3% from the same period a year ago, compared to the third quarter’s robust 16.2% increase.
  • Foreign Direct Investment (FDI) reached 184.4 trillion rupiah in the fourth quarter.
  • Excluding financial, oil, and gas sectors, Southeast Asia’s largest economy witnessed significant FDI growth, specifically in the nickel processing industry.
  • Base metal sectors led the FDI boom with $11.8 billion, followed by warehousing, telecommunications, pharmaceuticals, and pulp and paper industries.
  • Singapore, China, and Hong Kong were among the top contributors to FDI in 2023.

Fourth Quarter Economic Growth

Economic expansion in the fourth quarter decelerated sharply to 5.3% from the same period a year earlier, a drastic reduction from the third quarter’s formidable growth of 16.2%. The final quarter saw a total FDI value of 184.4 trillion rupiah.

Investment Exceptions

Exclusions from the ministry’s data include investments in the financial, oil and gas sectors. These figures are reported in rupiah currency terms.

Strong FDI Growth

Following the global pandemic, Southeast Asia’s largest economy, experienced a boost in FDI, particularly in its flourishing nickel processing industry.

Leading Industries

The base metal industry attracted the heaviest FDI in the previous year, amounting to $11.8 billion. Mining emerged fourth with an investment of $4.7 billion.

Areas of FDI Benefits

Beneficiaries of the increase in FDI include sectors such as warehousing, telecommunications, as well as the pharmaceutical and pulp and paper enterprises.

Main FDI Sources in 2023

Singapore, China, and Hong Kong stood out as the major sources of FDI in the year 2023.

A shift in FDI trends can impact foreign exchange markets and trading activities, and with the FDI boom, currencies, especially in the nickel processing industry and base metal sector, are anticipated to be affected.

PIP Penguin