Manufacturing’s Contribution to GDP Expected to Exceed 20 Per Cent

Jakarta (ANTARA) – Deputy Industry Minister Faisol Riza said the manufacturing industry’s contribution to gross domestic product (GDP) is expected to exceed 20 per cent in the future.

“We want manufacturing’s contribution to GDP to exceed 20 per cent,” Faisol said at the Indonesian Chamber of Commerce and Industry (Kadin) 2026 National Coordination Meeting on Investment, Downstreaming, Energy and the Environment in Jakarta on Tuesday.

He said this was a mandate and direction from President Prabowo Subianto.

“This is the President’s mandate and direction. We have strong foundations because our domestic market, with a population of 287.2 million, can generate household consumption of around Rp12.83 trillion, making it the largest contributor to economic growth while also raising manufacturing productivity,” he said.

Faisol added that although manufacturing capacity utilisation remained below 70 per cent, there was considerable room for growth.

“I should note that manufacturing continues to perform positively. Statistics Indonesia (BPS) data show it grew by 5.32 per cent in the second quarter of 2026, contributing Rp1,102.88 trillion to GDP, with investment realisation in the sector at around 38.98 per cent,” he said.

On exports, he added, non-oil and gas manufacturing accounted for 82.40 per cent of the national total.

BPS recorded Indonesia’s economic growth at 5.29 per cent year on year in the second quarter of 2026, driven primarily by manufacturing on the production side and household consumption on the expenditure side.

BPS Deputy for Balance Sheets and Statistical Analysis M Edy Mahmud previously said GDP in the second quarter of 2026 stood at Rp6,552.1 trillion at current prices and Rp3,576.2 trillion at constant prices.

By industry, manufacturing was the largest source of growth, contributing 0.90 percentage points. The sector grew by 4.52 per cent year on year and accounted for 18.50 per cent of GDP.

Economic growth was also supported by trade, which contributed 0.83 percentage points; construction, with 0.62 percentage points; and information and communications, with 0.48 percentage points.