In December 2024, Indonesia's Manufacturing Purchasing Managers' Index (PMI) rebounded to an expansive level of 51.2, up from a contraction of 49.6 in the previous months. This improvement was driven by increases in both domestic and export orders, alongside a rise in raw material purchases by companies. Coordinating Minister for Economic Affairs, Airlangga Hartarto, expressed optimism about the national economy's future prospects, which aligns with the World Bank's forecast for a 5.1% growth in 2024 and 5.2% in 2025. The positive manufacturing outlook is also attributed to government policies such as promoting local raw materials and providing fiscal incentives to support industrial growth.
Despite global uncertainties, the Indonesian manufacturing sector has demonstrated resilience, with industry confidence high due to rising production volumes and new orders. The government is prioritizing local raw material use to reduce production costs linked to currency fluctuations and is pushing for the downstream industrialization of natural resources. Additional measures, such as fiscal incentives, improved human resource quality, and trade cooperation, aim to support the sector. Furthermore, efforts to protect domestic industries through safeguards and anti-dumping measures are expected to strengthen Indonesia's manufacturing competitiveness, contributing to continued economic growth.
