Kadin Indonesia: Manufacturing Fuels 2025 Growth
Indonesia’s economy grew by 5.11% in 2025, with Kadin Indonesia highlighting the manufacturing sector as the main driver behind this growth. Increased investment and stronger industrial activity played a big role in this progress.
Indonesia’s Economy and Investment Show Strong Growth in Q4 2025
Kadin Indonesia states the economy expanded by 5.39% year-on-year in the fourth quarter of 2025. During the same period, manufacturing output grew by 5.40%, while investment, measured by gross fixed capital formation (GFCF), rose by 6.12%.
Kadin Indonesia also noted that local businesses continued to invest активно, with domestic investment growing faster than foreign investment. This trend shows strong confidence from Indonesian companies in the country’s economic future.
Indonesia’s Manufacturing Sector Poised for Nearly 6% Growth in 2026
Looking ahead, Kadin Indonesia expects manufacturing growth to reach close to 6% in 2026. This is likely to be supported by increased factory investment and better use of existing resources. The manufacturing sector currently contributes around 19% of Indonesia’s GDP, making it the largest contributor to the economy.
Indonesia’s Manufacturing Drives Growth Amid Agricultural and Construction Challenges
The country’s Manufacturing Purchasing Managers’ Index has remained strong, staying in expansion territory since August 2025 and reaching 52.6 in January 2026. This indicates continued growth in production.
Other sectors also showed growth. Agriculture expanded by 5.14% in the fourth quarter of 2025, but Kadin Indonesia pointed out ongoing productivity challenges. Even though about 28% of the workforce is in agriculture, it only contributes around 13% to GDP. Improvements such as modern technology and better land use are needed to boost output.
The construction sector grew by 3.81% and contributes nearly 10% to GDP. Kadin Indonesia stated that government programs like housing loans, school upgrades, and infrastructure projects could help support further growth in this sector.
Overall, Kadin Indonesia emphasises that strong manufacturing performance and continued investment will remain key to Indonesia’s economic growth.
