Indonesia targets manufacturing to exceed 20% of GDP

Indonesia's Deputy Minister of Industry, Faisol Riza, has announced goals to increase the manufacturing sector's contribution to the national Gross Domestic Product (GDP) to over 20 percent. Speaking at the 2026 Kadin Indonesia National Coordination Meeting in Jakarta, Riza stated that this objective follows mandates from President Prabowo Subianto.

Data from the second quarter of 2026 shows the processing industry grew by 5.32%, contributing Rp1,102.88 trillion to the GDP. Non-oil and gas processing industries currently account for 82.40% of total national exports. Despite this growth, industrial utilization remains below 70%, suggesting significant room for increased production and investment.

The government is prioritizing accelerated downstreaming (hilirisasi), technological mastery, and green industry principles. Specifically, Riza emphasized the need to improve the efficiency and global competitiveness of palm oil derivatives, such as glycerin, surfactants, and carotene, noting that Indonesia's current downstreaming in this sector lags behind Malaysia. The Ministry of Industry also aims for net zero emissions in the industrial sector by 2050 and a 15% circular material usage rate by 2029.