Apindo: Raw Material Supply and Energy Remain Challenges for Industry

The Indonesian Employers’ Association (Apindo) has stated that the supply of raw materials and energy costs remain the main challenges facing the national industrial sector. This situation is driving up production costs and imports of raw materials, contributing to Indonesia’s trade deficit in May 2026. Although exports are still growing, the surge in imports due to high industrial demand is putting pressure on national trade performance. The Central Statistics Agency (BPS) recorded that Indonesia’s trade balance experienced a deficit of US$1.61 billion in May 2026. Meanwhile, inflation in June 2026 reached 0.44% month-to-month, with a calendar year inflation of 1.79% and an annual inflation rate of 3.34%. Bob Azam, Chairman of the Employment Division at Apindo’s National Executive Board, explained that the increase in imports was influenced by the weakening of the rupiah exchange rate, rising energy prices, logistics costs, and financing interest. These factors have made imports, particularly for industrial raw materials and energy, increasingly expensive. ‘Exports are still growing, but imports have risen sharply due to the weakening rupiah and increases in energy prices, logistics costs, and interest rates,’ Bob Azam told Media Indonesia on Wednesday (1/7). He added that this pressure is not unique to Indonesia but is being felt by many countries, as global supply chain disruptions and logistics distribution have not yet fully recovered. On the other hand, Bob noted that demand from several of Indonesia’s main export markets remains relatively stable. However, a slowdown is beginning to appear in some East and Southeast Asian regions, including India and China. Therefore, business players need to improve operational efficiency while diversifying export markets to sustain growth amid global uncertainty. ‘The reality is that the supply of raw materials remains difficult, as does the energy supply,’ Bob said.