News Room - Business/Economics

Posted on 23 May 2008

Investment growth in 2008 expected to be the same as last year`s

Trade Minister Mari Elka Pangestu has predicted Indonesia`s investment growth in 2008 will be the same as last year`s despite the government`s plan to raise fuel oil prices by 28.7 percent.

"The investment growth will at least be the same (as last year`s). But we hope it will be higher than last year`s," she said here on Thursday.

The planned 28.7 percent rise in fuel oil prices would have a positive impact on investment growth because it would increase the government`s credibility in the eyes of investors, she said.

"Investors will think the government has taken credible macro economic steps and created macro stability that will contribute to a conducive investment climate," she said.

Data from the Investment Coordinating Board (BKPM) show domestic investment in 2007 grew by 67.8 percent to Rp34.9 trillion from a year earlier. Meanwhile, foreign investment in 2007 grew by 73.2 percent to US$10.35 billion from the year before.

The government has planned to raise the price of premium gasoline to Rp6,000 from Rp4,500 per liter, that of diesel oil to Rp5,500 from Rp4,300 per liter, and that of kerosene to Rp2,500 from Rp2,000 per liter.(*)