© Reuters. FILE PHOTO-A general view of the city skyline of Jakarta, the capital city of Indonesia, August 5, 2021. REUTERS/Ajeng Dinar Ulfiana/File Photo

JAKARTA (Reuters) – Incoming foreign direct investment to Indonesia grew 14.2% on a yearly basis in rupiah terms in the April-June quarter, the investment ministry said, the slowest growth pace in one and a half years.

FDI was worth 186.3 trillion rupiah in the second quarter, or $12.59 billion, using the conversion provided by the ministry. The data excludes investment in the banking and oil and gas sectors.

Indonesia has seen FDI rise sharply as the resource-rich country attracts investment in the manufacturing of stainless steel and battery materials, after it banned exports of nickel ore in 2020.

However, authorities have warned foreign investment might slow as investors opt for a wait-and-see approach ahead of general elections in February 2024.

FDI growth in the April-June period was the slowest since the fourth quarter of 2021. FDI rose 20.2% annually in the previous quarter.

Over $2.5 billion of investment went to the base metals industry, the biggest recipient of FDI in the second quarter, followed by the transportation, warehouse and telecommunications and the chemical and pharmaceutical sectors.

Singapore was the biggest source of FDI, followed by China, Hong Kong, Japan and Malaysia.

($1 = 15,020.0000 rupiah)

(This story has been corrected to say that Malaysia was the 5th biggest source of FDI in Indonesia in Q2, not the United States, in the last paragraph)

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