KEK as a Growth Engine, the Batang-Kendal Economy is Growing Above the National

Coordinating Minister for the Economy Airlangga Hartarto/Mery H-VOI

JAKARTA - The Coordinating Ministry for Economic Affairs revealed that areas with Special Economic Zones (KEK) with optimal management, such as Batang Regency and Kendal Regency, were able to record economic growth in the range of 8 to 9 percent, far exceeding the average growth of provinces and the national level.

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In Batang Regency, the presence of the Batang Industrialopolis KEK has encouraged the acceleration of investment, job creation, and improved community welfare.

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Based on data from the Central Statistics Agency (BPS), the economic growth of Batang Regency in 2024 reached 6.03 percent and increased sharply in 2025, with the growth of the third quarter of 2025 recorded at 8.52 percent on an annual basis (yoy), driven mainly by strong household consumption and investment.

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Coordinating Minister for the Economy Airlangga Hartarto said the experiences of Batang and Kendal regencies showed that the KEK was not only an investment incentive instrument, but also a catalyst for regional economic transformation.

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"Well-designed SEZs, supported by infrastructure, ease of doing business, and integration with local labor, have proven to be able to generate high and sustainable economic growth," he said in an official statement, Sunday, December 14.

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Airlangga said that a number of academic studies also showed that the existence of the Batang Special Economic Zone provided a significant multiplier effect on the local economy. The impact is seen from the increase in employment opportunities, the decrease in the unemployment rate, to the reduction in poverty rates.

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In fact, the percentage of poor people in Batang Regency has also been recorded as falling from 8.73 percent in 2024 to 7.79 percent in 2025, as economic activity and employment opportunities around the area increase.

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In addition to encouraging growth and absorption of labor, continued Airlangga, the development of KEK also contributes to increasing regional economic productivity.

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"The entry of new investments, the adoption of technology, and the development of the value-added processing industry at the Batang Industrial Estate have increased the efficiency of the production process and the value of output per worker, thus strengthening the competitiveness of the regional economy sustainably," he said.

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In addition to Batang Regency, continued Airlangga, Kendal Regency also showed very strong economic performance. In the third quarter of 2025, Kendal Regency's economy grew 8.84 percent (yoy), the highest in Central Java, driven by industrial and investment activities in industrial areas and KEK.

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According to Airlangga, this achievement indicates the strengthening of the regional industrial ecosystem, including the interregional spillover effect in the Batang-Kendal-Semarang corridor, and confirms that the development of the Special Economic Zone can become a source of sustainable new economic growth in the region.

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In the future, said Airlangga, the government considers that the experience of Batang and Kendal Regencies can become a model for the development of KEK in other areas, especially in creating new economic growth centers outside the metropolitan area.

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According to him, strengthening connectivity, regulatory certainty, human resource readiness, and linkages with MSMEs and the local economy will be the key to making the benefits of KEK felt more widely and inclusively.

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"The Coordinating Ministry for Economic Affairs will continue to coordinate cross-ministry/agency policies and regional governments to ensure that the KEK functions optimally as an instrument for accelerating investment, job creation, and the equitable distribution of national economic development," he said.