JAKARTA - The industrial confidence index alias IKI in January 2025 reportedly rose 0.17 points to 53.10 and remained expansionary. In the year on year (yoy), the value of IKI also increased by 0.75 points compared to January 2024 which was 52.35.
However, the Ministry of Industry noted that the Indonesian manufacturing industry is still a little depressed. This is evidenced by the limitation of the production rate, one of which is due to the effect of increasing Value Added Tax (VAT) by 12 percent. Although in the end the policy only applies to luxury goods.
"Industry in January 2025 slightly braked the production rate, why braked a little? That's because there are still a lot of stock of products in warehouses, there are still a lot of supplies. Then, why are there still a lot of stock in warehouses in January? Because the industry increased production in November and December 2024 to anticipate an increase in VAT 12 percent," said Ministry of Industry spokesman Febri Hendri Antoni Arif in the release of IKI January 2025 in Jakarta, Thursday, January 30.
As a result, before the announcement of the 12 percent increase in VAT was canceled, the industry also increased production. Thus, the stock of goods in the warehouse becomes large.
Febri assessed that this was natural because the industry needed to anticipate an increase in VAT by 12 percent, where goods produced in November-December will be sold from January with VAT 12 percent.
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"That's why the industry slightly restrained its production rate in January 2025, because the stock of goods in its warehouse is still large. However, the demand or new orders for the industry in January rose to meet the needs of the fasting month and Eid," he explained.
He hopes that the momentum of the fasting month and Eid will be the driving force of the industry to move. However, Febri did not deny that the stock in the warehouse, which is also a challenge in itself for manufacturing movements in January.
"Usually before religious day or holiday in the previous 1-2 months, the factory produced more. So, although production decreased slightly, because there was Eid, it became supported," he concluded.
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