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Investment and Downstream Minister Rosan Roeslani, who is also CEO of state asset fund Danantara, addresses a press conference on Dec. 17, 2025, at the Presidential Palace Complex in Central Jakarta. (Antara/Cahya Sari)
Indonesia's investment figures are improving, with investment realization exceeding Rp 1,000 trillion (US$57 billion) and portfolio inflows rebounding strongly in the first half of 2026. But the recovery has yet to dispel investor concerns. Policy uncertainty, governance issues and continued pressure on the rupiah suggest that confidence in Indonesia's long-term investment climate remains fragile.Investment Minister Rosan Roeslani recently announced that investment realization reached Rp 1,010.6 trillion (US$57 billion) in the first half of 2026, up 7.2 percent year-on-year. The increase was driven almost equally by foreign and domestic investors. Downstream industries remained the largest investment destination, accounting for around 30 percent of total investment. However, the focus has shifted from nickel to bauxite processing ahead of the government's planned ban on raw bauxite exports in 2027.
The composition of investment reveals deeper structural weaknesses. Foreign direct investment remains concentrated in extractive and commodity-based industries, while manufacturing continues to lag behind regional peers. Manufacturing contributes only around 19 percent of Indonesia's GDP, compared with more than 20 percent in Malaysia, Thailand and Vietnam.
