Determinants of Private Investment and The Effects on Economic Growth in Indonesia

Abstract

Investment is important part of development economic, especially on increase of economic growth. Through investment, various of production facilities will be provide, thus will give optimally production output and value added, as a result can improve the economic growth. Investment activities can be done by two main sectors, government and private. Majority of government investment commonly to finance physical and non-physical development that could not be conducted by society. Lack of capital in government sector influence low of encourage on physical infrastructure as driving of business and economic activities. That condition will impact on private investment. This study will explain the effect of government investment and another economic variables, such as economic growth, investment credit, interest rate, inflation and exchange rate, and the influence of private investment on economic growth in Indonesia