The Investment Coordinating Board (BKPM) of Indonesia announced today that investment realization figures for domestic and foreign direct investment in the fourth quarter of 2012 increased by 18.7 percent to IDR 83.3 trillion (US $9 billion) compared to the same period in 2011 (when it was IDR 70.2 trillion). For the whole year of 2012, the cumulative of investment realization is IDR 313.2 trillion, implying that it had surpassed the government target of IDR 283.5 trillion.

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An official at Indonesia's Finance Ministry announced today that Indonesia's gross domestic product (GDP) grew by 6.23% in 2012, thus failing to meet the government's revised target of 6.3-6.5%. Factors that contributed to Indonesia's lower than expected economic growth last year were weak exports due to poor international trade and non-optimal government spending. On the positive side, all sectors of the Indonesian economy experienced growth.

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Next year, Indonesia will have new parliamentary and presidential elections. Now already, these elections are highly relevant as political parties need to find ways to gain popular support and need to look for the right presidential candidates. Political parties or coalitions of political parties that receive at least 20 percent of the votes during the parliamentary election, are allowed to nominate a presidential candidate. Thereafter, a presidential election - in which a few candidates participate - will decide the next Indonesian president.

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This year, Indonesia will have to face declining production numbers in its oil and gas sector. Gas output is assumed to decline by 14.77 percent compared to last year, while oil output will reach similar levels as in 2012, provided that there are no disruptions due to bad weather and leakages (a prerequisite that will be hard to meet).

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