BI: Processing Industry Bolsters Central Java's Economy
The Bank Indonesia (BI) Representative Office for Central Java Province stated that the processing industry and trade are the main pillars of the region’s strong economic growth.
Head of BI Central Java Representative, M Noor Nugroho, in Semarang on Tuesday, said that the processing industry in the second quarter of 2026 grew by 5.03 percent (year-on-year), higher than the previous quarter’s 4.04 percent (yoy).
According to him, the improvement in the processing industry’s performance was mainly influenced by the increase in exports of manufactured goods, which grew by 41.26 percent (yoy) in the reporting period. The export increase was driven by the performance of TPT (Textile and Textile Product) commodities, wood furniture, footwear, and foodstuffs.
The improvement in the processing industry’s performance was also reflected in the improvement of the Net Weighted Balance for the processing industry based on the Business Activity Survey results in the second quarter of 2026.
He mentioned that the next largest source of growth came from the Trade business field, which grew by 7.52 percent (yoy) in the second quarter of 2026, higher than the first quarter of 2026’s 5.22 percent (yoy). Trade growth was driven by maintained public consumption, especially during the Idul Adha Religious Holiday and long holidays, along with a 5.09 percent (yoy) increase in public mobility compared to the previous year.
Additionally, the 2026 World Cup event, which took place in the second quarter of 2026, also boosted sales of jerseys, accessories, and other related products.
Furthermore, he explained that the provision of accommodation and food and beverages was one of the largest sources of Central Java’s economic growth and experienced the highest growth. The accommodation and food and beverage provision grew by 12.80 percent (yoy) in the second quarter of 2026, although it slowed from the previous quarter’s 14.14 percent (yoy).
The maintained performance of the accommodation and food and beverage provision was mainly supported by the performance of the accommodation and food and beverage sectors during the Idul Adha Religious Holiday and long holidays, along with increased public mobility, as well as the continuation of national priority programmes.
Meanwhile, growth from the expenditure side mainly came from Household Consumption and Gross Fixed Capital Formation (PMTB) or Investment. From the business field side, the main sources of growth came from the processing industry and trade.
From the expenditure side, household consumption, with the largest share of the Gross Regional Domestic Product at 59.73 percent, continued to grow strongly. Household consumption grew by 4.31 percent (yoy), but slowed from the previous quarter’s 5.08 percent (yoy).
“The performance of public consumption is also reflected in the Consumer Confidence Index value in the second quarter of 2026, which remains at an optimistic level,” he said.