Jakarta, INTI - Indonesia’s manufacturing sector continues to demonstrate strong performance as a key driver of the national economy. Throughout 2025, the non-oil and gas manufacturing industry recorded significant growth of 5,17% year on year, surpassing Indonesia’s overall economic growth of 5,01%.

In addition, the structure of the national industry has become increasingly robust. According to World Bank data, Indonesia’s Manufacturing Value Added (MVA) reached USD 265.07 billion, ranking first in the ASEAN region, followed by Thailand and Vietnam in second and third place, respectively. Meanwhile , data from Statistics Indonesia (BPS) shows that approximately 78,39% of this output is absorbed by the domestic market, underscoring the strategic role of the national industry not only as an export driver but also as the backbone of domestic demand.

The industry’s performance achievements must be supported by accountable, effective, and well-targeted governance to ensure that every program delivers tangible benefits for the development of the national industrial sector,” said Minister of Industry Agus Gumiwang Kartasasmita during the Kick-Off of the 2026 Budget Implementation Document (DIPA) of the Ministry of Industry in Jakarta on Wednesday, January 7, 2026. 

In terms of budget management, as of December 31, 2025, the realization of the Ministry of Industry’s total DIPA allocation reached 83.30 percent, exceeding the national average realization rate of 82.41 percent. Meanwhile, realization based on the effective budget ceiling stood at 97.65 percent and is expected to continue increasing as administrative processes are completed in early January 2026.

“Nationally, the Ministry of Industry’s budget realization ranks 56th out of 104 ministries and agencies. This performance serves as an evaluation point to further improve budget management in the future,” he added.

As the 2026 fiscal year begins, the Ministry of Industry has reaffirmed its commitment to accelerating the implementation of programs and activities through more thorough planning, timely budget absorption, and the strengthening of accountability and transparency principles.

This commitment to sound public financial governance is also reflected in various institutional achievements. The Ministry of Industry has received an Unqualified Audit Opinion (Wajar Tanpa Pengecualian/WTP) for 17 consecutive years from 2008 to 2024. In addition, the ministry was awarded the ‘Reksa Bandha’ accolade for its performance in managing state-owned assets, both in terms of utilization and reporting quality, underscoring its consistent and value-driven asset management practices.

Looking ahead to the 2026 policy direction, the government has set industrial development priorities focused on strengthening the national economic structure, enhancing competitiveness, and ensuring sustainable growth. Under the 2026 Government Work Plan, non-oil and gas manufacturing GDP growth is targeted at 5,5%, with the sector contributing 18,56%  to national GDP.

In line with this direction, based on the Ministry of Industry’s Strategic Plan for 2025–2029, the contribution of non-oil and gas manufactured products to exports in 2026 is targeted to reach 74,85%. The industrial sector also remains positioned as a key driver of job creation, accounting for 14.68 percent of total national employment, with labor productivity projected at IDR 126.20 million per worker per year. To support these targets, investment in the non-oil and gas manufacturing sector is projected to reach IDR 852.90 trillion

To promote more balanced development, the government continues to increase the contribution of industrial value added outside Java, targeting a share of 33,25%. These efforts are aimed at building a more inclusive and regionally balanced industrial structure. In line with its commitment to sustainable development, the industrial sector is also expected to contribute to a reduction of greenhouse gas emissions by 6.79 million tons of CO₂ equivalent in priority industries.

To support the achievement of these targets, the Ministry of Industry is implementing a range of priority programs focused on industrial downstreaming, industrial estate development, strengthening domestic industries, increasing the availability of raw materials, developing industrial human resources, promoting green industry practices, modernizing industrial technologies, and enhancing the integration between industrial and regional development.

‘All of these programs are designed to strengthen national industrial resilience while increasing value added and global competitiveness,’ the Minister of Industry emphasized.

For the 2026 fiscal year, the Ministry of Industry has been allocated a DIPA budget ceiling of IDR 2,501.8 trillion, with an effective budget of IDR 2,112.1 trillion. The budget is sourced from pure rupiah allocations, non-tax state revenue (PNBP), and public service agency (BLU) funds, and is strategically directed to support the achievement of industrial development targets.

In terms of expenditure composition, the budget is allocated for personnel spending amounting to IDR 1,080.9 billion, operational spending of IDR 344.8 billion, and non-operational spending of IDR 686.3 billion, with an emphasis on improving service quality, program effectiveness, and delivering tangible impacts for the industrial sector. Regarding fiscal adjustments, a blocked allocation under code A amounting to IDR 89.8 billion will be addressed in accordance with applicable regulations. 

Special RO Budget Utilization Plan 

Specifically, the Ministry of Industry has been allocated a Special RO budget of IDR 299.9 billion for 2026, which will be focused on three main agendas. The first priority is the implementation of mandates stipulated in industrial regulations, particularly those aligned with the President’s priority agenda.

The second key agenda involves the recovery of small-scale industries in the post-disaster regions of Aceh, North Sumatra, and West Sumatra, aimed at accelerating the restoration of regional economic activities. ‘Recovery alone is not sufficient; our communities need to recover faster. It is hoped that these government programs will facilitate the restart of small industry activities in the three provinces affected by the disasters,’ the Minister of Industry stated.

The third major focus is Indonesia’s participation as a Partner Country at INNOPROM 2026, intended to strengthen the promotion of national industries and enhance international cooperation.

“All budget allocations are directed to ensure that every rupiah delivers tangible impact, supports priority programs, and strengthens the role of the national industry as a driver of inclusive and sustainable economic growth,” he concluded. 

Conclusion

The Ministry of Industry’s 2026 strategy underscores a strong commitment to disciplined budget management and targeted industrial development. Through priority programs, strategic investments, and strengthened governance, the policy direction aims to enhance industrial resilience, boost competitiveness, and ensure that industrial growth contributes to inclusive and sustainable economic progress in Indonesia.

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