Indonesia Eyes 4% Growth in Manufacturing Industry
Minister of Industry Agus Gumiwang Kartasasmita affirmed his commitment to boost national economic competiveness and increase growth in manufacturing industry to four percent through four strategies.
First, by issuing 18,527 operational and mobility permits (IOMKI) for industrial companies nationwide that allow them to operate during the pandemic. The policy has so far protected 5.16 million manpower from layoffs.
Second, by improving the capacity of national pharmaceutical industry to produce medicines and medical equipment in a bid to support the handling of COVID-19 pandemic.
Third, by increasing the use of domestic goods usage intensification (P3DN).
Fourth, by carrying on import substitution program of 35 percent. This program is implemented simultaneously with measures to increase product utilization, strengthen industrial manufacturing sector, and increase investment.
Through those efforts, the Minister expressed his belief that national manufacturing industry will see a positive growth of four percent in 2021.
The Minister went on to say that COVID-19 vaccination program and the implementation of Law Number 11 of 2020 on Job Creation are keys to stimulate national industry and to speed up economic recovery.
“It will stimulate manufacturing subsectors, once the pandemic is curbed and economy is recovered,” he said adding that Indonesia’s Manufacturing Purchasing Managers’ Index (PMI) climbed to 51.3 in December from 50.6 a month earlier.
For the record, a PMI above 50 represents is an expansion and Indonesia’s Manufacturing PMI in December was the country’s fastest pace of expansion in the history of IHS Markit’s survey.
The Minister further explained that in two consecutive months, Indonesia’s Manufacturing PMI was at expansive phase. Industry players decided to boost their production since they saw a rebuild in domestic consumption and there was a signal that COVID-19 vaccine will be available.
In addition, processing industry also saw an expansion and is projected to improve in the first quarter of 2021. The expansion is indicated by Bank Indonesia’s Prompt Manufacturing Index which was recorded at 47.29 percent in the fourth quarter of 2020, climbed from that of the second and third quarters, which were at 45.64 and 44.91 percent.
“Investment on industrial sector in January to September 2020 also increased by 37 percent compared to that of the same period last year, while investment on manufacturing industry also increased significantly. It is expected to support economic recovery in 2021,” he stated. (MINISTRY OF INDUSTRY PR/UN) (RAS/MMB)