The Contribution Of The 2023 Processing Industry Drops Compared To 2019, The Ministry Of Industry Reveals The Cause

Head of the Standardization and Industrial Services Policy Agency (BSKJI) of the Ministry of Industry Andi Rizaldi (right). Photo: Theresia Agatha/VOI

JAKARTA - The Ministry of Industry (Kemenperin) revealed the cause of the decline in the contribution of the processing industry to gross domestic product (GDP) which only reached 18.67 percent throughout 2023.

In fact, the contribution of the processing industry in five years ago or 2019 itself was recorded at 19.70 percent.

Head of the Standardization and Industrial Services Policy Agency (BSKJI) of the Ministry of Industry Andi Rizaldi said there were various factors that caused this. One of the main causes is the decline in consumption levels.

"Perhaps from various factors, there are internal factors from our consumption level. So, it seems that it may have a big impact from consumption," Andi told VOI when met at the inauguration of the Natural Medicine Production Facility at the Center for Standardization and Chemical, Pharmaceutical and Packaging Industry Services (BBSPJIKFK) in Jakarta, Tuesday, February 6.

Andi assessed that the decline in consumption levels greatly affected the growth of the processing industry.

"The possibility of consumption has also decreased somewhat so that it has an impact on growth," he said.

In addition, Andi said that there are other external factors such as the share of the export market which has decreased due to geopolitical turmoil between Palestine and Israel.

"Now that some of our commodities depend on exports. Automatically, if geopoliticals are disrupted, exports will also be disrupted," he said.

Furthermore, said Andi, his party is optimistic that the growth of the manufacturing industry will increase in 2024.

When asked further about the growth target in 2024, Andi could not provide further information.

"It should be higher because we have a minimum 2020-2024 target (processing manufacturing industry) in the average or if it can increase," he said.

According to Andi, one of the industries that can support the growth of the processing industry is metal.

"If I'm not mistaken, the metal industry is quite large and the food industry is also quite large," he added.

Based on data from the Central Statistics Agency (BPS), the largest contributor to economic growth in 2023, namely the processing industry with a portion of 18.67 percent or an increase compared to 2022 of 18.34 percent.

Plt. Head of BPS Amalia A. Widyasanti said that all business fields grew positively in 2023 to continue the positive growth trend.

"Business opportunities with the largest contribution to the economy, namely the manufacturing, trade, agriculture, mining and construction industries continue to continue the positive growth trend in 2023," Amalia said in a BPS release, Monday, February 5.

In terms of growth, the processing industry grew by 4.64 percent. This figure is lower than the growth in 2022, which was 4.89 percent.