The government stressed the need to optimize purchases of domestic industrial products through procurement by central and regional governments and state-owned enterprises. This is seen as building national economic self-reliance and resilience, even benefiting the grassroots economy.
“At yesterday's Plenary Cabinet Meeting, President Joko Widodo said our economic growth is normal and good at 5.01%. This is a very good figure compared with other countries, so we must maintain this growth and, if possible, increase it in the second quarter,” Minister of Industry Agus Gumiwang Kartasasmita said in Jakarta on Tuesday (10/5).
The Minister said that to spur national economic performance, the President asked relevant ministers to actively monitor spending in each ministry, agency, regional government and state-owned enterprise. “What needs close attention is the quality of spending, because accelerating spending must truly be expedited to maintain consumption and purchasing power,” he explained.
Agus said central and regional government spending potential currently reaches IDR 1,071.4 trillion, IDR 400 trillion of which will be absorbed through domestic product spending throughout 2022. “To date, Domestic Product (PDN) purchase commitments total IDR 216.77 trillion from 18 ministries/agencies, 34 provincial governments and 276 city/regency governments,” he said.
The Minister stressed his ministry is determined to keep running the Increased Use of Domestic Products (P3DN) program, so domestic industrial products are absorbed in procurement projects of central and regional governments and state-owned enterprises.
“As of 7 April 2022, there are 13,891 domestic industrial products with a domestic component level (TKDN) above 40%, and 7,574 industrial products with TKDN between 25% and 40%,” he said.
Agus added that the P3DN program is a concrete step of support for domestic industry and products, giving domestic industry the chance to grow and improve its competitiveness. “So our industry players will also be able to compete globally,” he added.
Despite global challenges and competition and the impact of the Covid-19 pandemic, manufacturing still shows its performance as the main driver of the national economy. This is reflected in indicators such as non-oil and gas manufacturing growth of 5.47% in Q1 2022 (y-o-y), exceeding economic growth of 5.01%.
Non-oil and gas manufacturing contributed 19.19% in Q1 2022, the highest of all sectors. Industrial exports up to March 2022 reached USD 50.52 billion, a dominant 78.83% of total national exports.
“Realized investment in manufacturing increased, reaching IDR 103.5 trillion in Q1-2022. Indonesia's Manufacturing Purchasing Managers Index (PMI) also remained expansionary, at 51.9 in April 2022,” he concluded.
Source: Press Release of the Ministry of Industry of the Republic of Indonesia