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Govt eyes ‘limited’ import ban, subsidies to prop up manufacturers
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Residents wade through floodwaters dyed red from the waste of a batik factory in Pekalongan, Central Java, on Feb. 6, 2021. (AFP/Shaka)
T
he Industry Ministry has laid out plans to boost state revenue from manufacturing in 2023, claiming the sector could grow up to 5.4 percent next year despite weak international demand for Indonesia’s non-commodity goods.
Industry Minister Agus Gumiwang Kartasasmita said on Tuesday that although the COVID-19 pandemic had subsided, global inflation remained high and the war in Ukraine had created uncertainty regarding supply and demand.
According to Industry Ministry data, non-oil and gas manufacturing growth in the second and third quarters of 2022 was below gross domestic product (GDP) growth, reversing the trend in the first quarter, where the sector outpaced GDP growth with 5.47 percent year-on-year (yoy) growth.
However, manufactured goods still made up 16.10 percent of GDP in the third quarter, while also accounting for 70.81 percent of the country’s exports in the year to November.
Agus noted that several challenges had hampered the growth of the sector in 2022. Nonetheless, he expected the manufacturing industry to have grown 5.01 percent by the end of 2022 and to grow 5.1 to 5.4 percent in 2023.
Exports of manufactured goods in 2022 were expected to have risen about 18.7 percent yoy to US$210.38 billion, while 2023’s forecasts were in the range of $225 billion to $245 billion.
“There is pressure as a result of lower factory output amid lower global demand and faster expansion in the non-manufacturing sector,” Agus told reporters.
