The Influence Of The Global Economy Causes The Decreased Exports Of Manufacturing Industry

Spokesperson for the Ministry of Industry Febri Hendri Antoni Arif. (Photo: Doc. ANTARA)

The Ministry of Industry (Kemenperin) said the decline in exports of the non-oil and gas or manufacturing processing industry recorded in June 2023 was caused by the influence of world economic conditions, including China, which slowed its economic growth.

"Economic conditions in export destination countries can cause reduced demand for products from Indonesia," said Ministry of Industry spokesman Febri Hendri Antoni Arif in Jakarta, Thursday, July 20.

Based on data from the Central Statistics Agency (BPS), the export of the non-oil and gas processing industry in June 2023 was USD 15.25 billion, down 2.24 percent compared to May 2023.

However, in volume, exports in June 2023 increased by 13.94 percent (month to month) to 11.51 million tons.

Overall, Indonesia's exports in June 2023 fell by 5.08 percent compared to May 2023, to 20.61 billion US dollars.

The decline in exports, both in the oil and gas and non-oil and gas sectors, was caused by the decline in the price of leading export commodities.

The exports of the manufacturing industry in June 2023 reached 15.25 billion US dollars, and contributed 74.01 percent to the total national exports.

Exports of the non-oil and gas processing industry in June 2023 were still dominated by the food industry of US$3.81 billion, the basic metal industry of US$3.23 billion, the chemical and goods industry of chemicals (1.26 billion US dollars), the motor vehicle industry, trailers, and semi-trialers (US$770 million), as well as the computer industry, electronic goods, and optics (745.8 million US dollars).

"Meanwhile, the commodity of the non-oil and gas processing industry that experienced the largest decline in exports in June 2023 (m-to-m), namely the basic metal industry, other transportation equipment industries, paper and goods industries, the chemical and goods industry from chemicals, the skin industry, leather goods, and footwear, the rubber industry, rubber and plastic goods, as well as the electronics, electronic and optical industries," said Febri.

Meanwhile, the import value of the non-oil and gas processing industry in June 2023 also decreased by 17.26 percent (m-to-m), to 13.66 billion US dollars.

"According to BPS, the largest decline in imports occurred in the raw/auxiliary material group as a support for domestic production activities," he said.

The largest drop in imports in the manufacturing industry is shown by the chemical and goods industry sub-sector of chemicals, then the YTDL machine and equipment industry, the basic metal industry, and the computer industry, electronics and optics.

The largest decline in commodity imports of the non-oil and gas processing industry occurred in mineral fuels, machinery and mechanical equipment as well as their parts, and machinery and electrical equipment and parts.

According to Febri, the decline in export and import performance will certainly affect the condition of the Indonesian manufacturing industry sector. Even so, he is still optimistic about the market conditions in the country.

"According to Bank Indonesia, Indonesia's economic growth remains good because it is supported by domestic demand, as well as strong investment," he said.

Anticipating the negative impact of the decline in exports and imports on the performance of the manufacturing industry sector, the Ministry of Industry continues to monitor the dynamics of the global economy.

The dynamics of the global economy certainly affects the non-oil and gas processing industry sector from Indonesia.

"We continue to monitor this condition, especially which has a huge impact on the industrial sector, to be able to take strategic steps to support the industrial sector," he concluded.