Presidential Adviser Admits Indonesian Garment Industry Shaken by Falling Public Purchasing Power

Presidential Special Adviser on Employment and Labour Welfare, Said Iqbal, has acknowledged that the garment industry is experiencing shocks due to a decline in public purchasing power. He made the statement during a visit to PT Victory Apparel in Semarang, which is set to cease operations and lay off 846 workers.

Speaking to the media, Iqbal revealed that after completing his visit to PT Victory, he would travel to PT Samwon Busana Indonesia in Jepara. Like PT Victory, PT Samwon has also collapsed and will lay off around 600 workers. Previously, the nation’s largest textile and textile product company, Sukoharjo-based PT Sri Rejeki Isman Tbk (Sritex), had already been declared insolvent and gone bankrupt.

When asked about the spate of garment industry closures across the country, Iqbal acknowledged that the decline in public purchasing power is a contributing factor. “The first factor is the decline in people’s purchasing power. That must be acknowledged, and the government also acknowledges it. The decline in purchasing power leads to a decrease in production. A decrease in production naturally leads to efficiency measures by companies,” he said on Monday (27/7/2026).

Nevertheless, Iqbal claimed the government is making efforts to boost purchasing power. “For two consecutive years, President Prabowo has increased workers’ wages. For ten years, wages did not increase. But since Mr Prabowo became President, workers’ wages rose by 6.5 percent in 2025, 6.5 percent in 2026, and even up to 9.5 percent. This is to increase purchasing power so that production can be absorbed,” he stated.

“If production can be purchased by workers and the public, that will increase production, which in turn creates employment,” Iqbal added.