Manufacturing Growth Outpaces Indonesia’s Economy in Q2 2026

RRI.CO.ID, Jakarta - Indonesian Industry Minister Agus Gumiwang Kartasasmita said the non‑oil and gas manufacturing industry (IPNM) recorded positive growth in the second quarter of 2026 (Q2 2026), outpacing national economic growth.

“The growth of the non‑oil and gas processing industry (IPNM) stood at 5.32 percent year‑on‑year (yoy), higher than the national economic growth rate of 5.29 percent,” Minister Agus said during a working meeting with the House of Representatives’ Commission VII at the Senayan Parliament Complex in Jakarta on Monday, August 31, 2026.

Citing data from the Central Bureau of Statistics (BPS), Minister Agus noted that the IPNM is the largest contributor to national economic growth, accounting for 0.97 percentage points. IPNM exports also made up nearly 82 percent of total national exports.

He added that the last time manufacturing growth exceeded overall economic growth was 14 years ago. “And aside from the 2025 data, the last time manufacturing growth surpassed economic growth was 14 years ago,” he said.

Indonesia’s manufacturing performance is also reflected in the World Bank’s 2025 Manufacturing Value Added figures. “Indonesia’s Manufacturing Value Added reached USD 275.61 billion,” Minister Agus said.

This figure increased from USD 265 billion in 2024. Indonesia also rose to 12th place globally in 2025, up from 13th in the previous year. “In 2025, Indonesia rose to 12th place compared to 2024. Among ASEAN countries, we are ranked first in manufacturing value‑added creation,” he said.

Amid these achievements, Minister Agus emphasized the need to strengthen domestic demand for national manufacturing products. A total of 78.4 percent of manufacturing output is absorbed domestically, while 21.6 percent is exported.

“These positive achievements in the industrial or manufacturing sector must always go hand in hand with strengthening the domestic market. Currently, 78.4 percent of our manufacturing output is absorbed by the domestic market,” he said.

In terms of capacity, the IPNM utilization rate remains at 64.8 percent. “We still need to increase this figure to at least 70 percent or higher,” Minister Agus said.

To secure the domestic market, the Ministry is implementing several policy instruments. “These include mandatory Indonesian National Standards (SNI), the application of the Domestic Component Level (TKDN) in the procurement of local products, the implementation of green industry standards, and halal certification,” he said. (Gusti Panji)