• Prasasti Responds to Q2 2025 Investment Realization Reaching IDR 477.7 Trillion. 
• Trade and Repair Enters Top Five Investment Recipients, Signaling Economic Structure Transformation. 
• Structural Challenges Must Be Addressed, Formal Jobs Concentrated in Urban Areas. 

Jakarta, August 1, 2025 – The Indonesian Investment Coordinating Board (BKPM) reported that Indonesia’s investment realization in Q2 2025 reached IDR 477.7 trillion, up 2.7% from the previous quarter’s IDR 465.2 trillion. With total investment in the first half of the year amounting to IDR 942.9 trillion, Indonesia has already achieved nearly 50% of its annual target of IDR 1,905.6 trillion.

This achievement sends a positive signal amid global uncertainty, further strengthening the trajectory toward achieving the national investment target of IDR 13,000 trillion over the next five years as set by Bappenas to support economic growth of up to 8% annually. According to Gundy Cahyadi, Research Director at Prasasti Center for Policy Studies, these figures reflect the increasing resilience of the national economy. “Investment momentum remains intact. In the face of challenging global dynamics, the fact that Indonesia can sustain this investment inflow reflects investors’ confidence in our long-term economic prospects,” he said.

By sector, basic metal industries contributed the largest share, with investment reaching IDR 67.1 trillion or 14.1% of the total, driven mainly by the continuation of mineral downstreaming policies. The mining sector also saw a significant increase, totaling IDR 53.6 trillion, supported by global demand for nickel and other strategic minerals. Meanwhile, the transportation, warehousing, and telecommunications sector recorded a decline to IDR 44.2 trillion. Interestingly, the trade and repair sector entered the top five investment recipients for the first time, with IDR 40 trillion. “This trend indicates that an economic structural transformation is underway. Downstreaming remains the main magnet, but the emergence of new sectors such as trade reflects positive dynamics on the ground,” Gundy added.

Despite the overall increase in investment, Foreign Direct Investment (FDI) contracted by 6.9% compared to the same period last year. FDI in Q2 was recorded at IDR 202 trillion, or 42.3% of total direct investment. This marks the first annual decline since Q3 2021, reflecting heightened caution among global investors due to external uncertainties, including the potential continuation of Trump-era tariffs in the United States. Nonetheless, FDI projections for this year still point to around IDR 900 trillion—more than double the pre-pandemic annual average. “Investors are adopting a more cautious stance in the short term, but they still view Indonesia as a strategic destination. Our economic fundamentals and structural policy direction remain strong attractions,” Gundy explained.

In terms of employment, investments in this quarter created 665,764 new jobs, up 12% from Q1. Nearly half of these were generated outside Java, reflecting progress in the agenda for equitable development. However, “Structural challenges remain a concern. Formal employment is still concentrated in urban areas, and has yet to keep pace with the annual labor force growth of 3.5 to 4 million people. Limited social protection in the informal sector also narrows job choices and exacerbates inequality,” said Gundy. He also emphasized the need to address medium-term risks such as automation. “Around 30% of jobs in manufacturing and agriculture are at risk of being replaced by automation within the next 10–20 years. At the same time, 22–23% of Indonesian youth are neither working, studying, nor undergoing training. This is a serious warning for our development agenda,” he said.

According to him, Indonesia is not lacking in capital but must ensure that investment flows into sectors that can generate quality growth and resilient, inclusive jobs. “We already have the momentum and a strong foundation. What is needed now is the right policy mix—strengthening human capital, providing legal certainty for investors, and promoting balanced regional development. The foundation is there. It’s about how we build on it correctly,” Gundy concluded.