Manufacturing Slump: DPR Pushes to Boost Foreign Investor Confidence in Indonesia

Global uncertainty and geopolitical turmoil remain issues affecting the global economy, including Indonesia. Amid soaring world oil prices, supply chain disruptions, and pressure on the Rupiah exchange rate, Indonesia recorded inflation of 3.24% (year-on-year) in June 2026, driven by rising fuel prices and airfares. Indonesia’s export-import performance in May 2026 saw a trade balance deficit of USD 1.61 billion due to a widening deficit in the oil and gas sector. Similarly, the Purchasing Managers’ Index (PMI) contracted to a level of 46.9 in June 2026. Examining the release of Indonesia’s macroeconomic data, the Chair of Commission XI of the Indonesian House of Representatives (DPR RI), Mukhamad Misbakhun, stated that these economic indicators have been and continue to be scrutinated by the government. Regarding the trade balance deficit, this is inseparable from the impact of prioritising domestic fulfilment, such as the decline in exports of coal and palm oil intended for domestic supply, making this deficit a consequence that had been anticipated. Misbakhun also revealed that one worrying factor is the contraction of the manufacturing PMI to 46.9, as it relates to the development of Indonesia’s manufacturing industry. Meanwhile, the rise in inflation had been predicted as a result of the weakening Rupiah exchange rate, which caused an increase in imports of industrial raw materials, affecting the prices of related goods. In facing these conditions, the DPR is pushing for the realisation of foreign investment in Indonesia to boost the performance of the manufacturing industry, increase job creation, and drive the economy.