First Quarter Of 2022, ILMATE Sector Growth Reaches 9.8 Percent

Production activities in the metal industry sector. (Photo: ANTARA)

JAKARTA - The Ministry of Industry (Kemenperin) said that the Metal, Machinery, Transportation Equipment and Electronics (ILMATE) industry in the first quarter of 2022 grew 9.86 percent year on year (yoy), indicating the trend of Indonesia's economic recovery continues to strengthen.

"The ILMATE sector is a manufacturing industry group that plays an important role in the formation of Gross Domestic Product (GDP)," said Secretary of the Directorate General of ILMATE at the Ministry of Industry M Arifin as quoted by Antara, Friday, May 27.

Based on data from the Central Statistics Agency (BPS), in the first quarter of 2022, the ILMATE sector contributed 4.19 percent to the national GDP and 24.19 percent to the GDP of the non-oil and gas industry.

The largest contributor to ILMATE's growth was supported by a number of sub-sector increases, such as the transportation equipment industry which grew 14.20 percent, followed by the machinery and equipment industry 9.92 percent, the base metal industry 7.90 percent, as well as the metal, computer, electronic and optical goods industry. by 6.80 percent.

Arifin explained, the transportation equipment industry grew above double digits since the second quarter of 2021 due to the policy of extending the Sales Tax on Luxury Goods Borne by the Government (PPnBM-DTP) policy which has been in effect since March 1, 2021.

"This policy encourages the growth of demand for commercial vehicles and the improvement of people's purchasing power in the midst of the national economic recovery," he explained.

In the first quarter of 2022, the trade rate for cars, motorcycles and their repairs grew 7.41 percent, driven by increased car sales.

So far, there have been 36 types of vehicles up to 2,500 cc from seven companies that have received PPnBM DTP incentives.

"To encourage GDP growth in the transportation equipment industry sector, which contributed 1.53 percent in the first quarter of 2022, the government has extended the PPnBM-DTP program for the motor vehicle industry," he added.

This policy is stated in the Minister of Finance Regulation (PMK) Number 5/PMK.010/22 concerning Sales Tax on Luxury Goods on the Delivery of Taxable Goods Classified as Luxury in the form of Certain Motorized Vehicles borne by the Government for the 2022 Fiscal Year.

"This PMK contains the design of new incentives that are tailored to the conditions for the future recovery of the automotive sector for four-wheeled motor vehicles with a local component content value of at least 80 percent," said Arifin.

Next, the machinery and equipment industry has also grown since the first quarter of 2021 and in the first quarter of 2022 the increase in GDP of this sub-sector was driven by an increase in demand and mining business fields, especially coal and nickel commodities.

In addition, there has been an increase in overseas demand for excavators and graders or levelers.

"The increase in the growth of the YTDL machinery and equipment industry that will occur throughout 2021, one of which is driven by demand for heavy equipment from various business fields, including the mining, agro, construction, and forestry sectors," said Arifin.

The Indonesian government invites all potential investors to contribute in developing reserves.

"The government offers ease of doing business and supporting facilities for investors, ranging from regulations, licensing, to fiscal and non-fiscal incentives," he said in a written statement, Thursday, May 12.