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New investments expected to boost manufacturing sector in H2
The growth of the manufacturing sector fell to a modest 4.39 percent in the first half, a far cry from the annual target of 5.4 percent
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Vice President Jusuf Kalla (right) visits Toyota Indonesia’s booth at the Indonesia Convention Exhibition in Serpong, Tangerang, Banten, on July 18. Indonesia's manufacturing sector grew 3.98 percent in the second quarter. (Antara/Muhammad Iqbal)
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ew investments are expected to prop up the growth of the country’s manufacturing sector that continued to show a downward trend in the first half.
The manufacturing industry booked 3.98 percent growth in the second quarter, much lower than the GDP growth of 5.05 percent in the same period last year, according to the latest manufacturing data issued by Statistics Indonesia (BPS).
The figure is lower than the 4.27 percent recorded in the second quarter, although it improved slightly from 3.93 percent in 2017. The second quarter figure brings the growth of the manufacturing sector to a modest 4.39 percent in the first half, a far cry from the annual target of 5.4 percent.
The growth in the chemical and pharmaceutical industry saw a 0.22 percent decline as opposed to 4.10 percent increase in the first quarter. A similar downturn was also seen in the textile and garment industry, the growth of which shrunk to 5.12 percent from 9.04 percent.
Speaking to The Jakarta Post on Tuesday, Indonesian Pharmaceutical Association (GP Farmasi) executive director Darodjatun Sanusi said the figure shown by the BPS did not represent the entire industry as it only surveyed large companies.
However, the reported decline was not so far-fetched from reality, he said, as the industry was hampered by late payments from the Health Care and Social Security Agency (BPJS Kesehatan), which runs the National Health Insurance (JKN) program, as its big client.
“We business players are trying not to be pessimistic, but we have not seen any factors that can make us optimistic,” Darodjatun said. “Our growth highly depends on the JKN [...] but the payment for our pharmaceutical supplies are always late.”
