"While it stagnates when compared to the previous month when it had reached 51.9, it is quite spread out in developed and developing countries," the Ministry's Fiscal Policy Agency (BKF) Head, Febrio Kacaribu, noted here on Friday.
Stagnation of the manufacturing sector's expansion is deemed to be quite spread out, whether in developed or developing countries, such as the Philippines, with 54.1; Malaysia, 50.1; India, 54.6; Eurozone, 54.6; and the United States, 57.
Meanwhile, China's Manufacturing PMI still rises to the level of 48.1, albeit within the contraction zone.
According to Kacaribu, disruption of the supply chain and the COVID-19 restriction policy in China had affected the manufacturing performance in several countries.
This is due to China's major contribution within the global supply chain.
"We will continue to anticipate this, so that this risk does not hinder the pace of Indonesia's economic recovery," he emphasized.
In addition, the ongoing geopolitical conflict as well as social restriction in China due to the pandemic also puts pressure on the supply flow and the time to deliver goods into the country in May.
Related news: Indonesia's July Manufacturing PMI index reaches 46.9
This condition hinders the manufacturing sector in optimizing the capacity of its production and raises the price of input goods that adds even more pressure.
Despite this, Kacaribu is optimistic that the manufacturing sector would recover along with the relaxation of lockdown rules in China.
In fact, the manufacturing production capacity currently continues to improve and has started to approach the average rate during the pre-pandemic period.
Moreover, he emphasized that the government's intervention to control the price is also crucial to maintain the momentum of recovery.
"The rise in commodity prices is also expected to have a positive impact on the activity of the business world, in general," he noted.
Related news: PMI improvement indicates rise in manufacturing sector: ministry
Translator: Astrid F H, Fadhli Ruhman
Editor: Rahmad Nasution
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