Indonesia's inward foreign direct investment eased to USD6.9b in 3Q

It would've surpassed the IDR70t mark for the first time.

According to DBS, Indonesia's total inward foreign direct investment (FDI) eased to USD 6.9bn in 3Q but still represented a near 10% YoY jump.

Here's more from DBS:

In Rupiah terms, the amount would have surpassed IDR 70tn for the first time ever (about IDR 72.5tn), based on an average USD/IDR at 10500 for the period.

The official data released by the Investment Coordinating Board (BKPM) has the amount at IDR 67tn. This was rather misleading as it was based on USD/IDR at 9600, as assumed in the 2013 Budget.

Confusion aside, the data should be a positive for the medium-term outlook of the economy. Total FDI in the first three quarters stands at USD 21.2bn, still on course to surpass the record USD 24.6bn seen in 2012.

Continuing the trend in recent years, mining and transport remain as the top magnets for FDI. While the mining sector is already quite liberalized, foreign ownership in many fields within the transport sector is still currently limited to 49%.

The eagerly awaited revision to the negative investment list could spark more interest in this sector (and others, depending on which sectors will be further liberalized). The USD 35bn annual FDI target by 2015 may still be within reach.

The cautious outlook signalled by the BKPM was understandable. The pace of the global economic recovery has been disappointing.

Having seen the Rupiah depreciated by more than 10% since May, some investors may choose to hold back for now. Those in for the long ride though would continue to tap into the country’s growth potential.