The manufacturing purchasing managers' index (PMI) in October 2022 continued the expansionary trend seen in the previous 13 months to reach a level of 51.8, although it was slightly lower than the previous month’s level of 53.7.
"Of course, we should be grateful for this because this happened in the midst of escalating global risks,” Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Kacaribu, said here on Wednesday.
Production output is also still showing an expansive trend, in line with the production capacity indicator from the results of a Bank Indonesia (BI) survey, which rose to near pre-pandemic levels in the third quarter of 2022, he added.
He said that the overall optimism of business players has continued to increase and the level of domestic demand is still strong, so this is expected to be the basis for the manufacturing sector to continue to be consistently in the expansion zone.
"The government continues to optimize the state budget as a shock absorber to be able to encourage public demand to support optimism in the business sector," he added.
The government and the relevant authorities will also anticipate various global risks that have the potential to affect the trade balance and the economy in general.
These risks include slowing international trade activities in developed countries due to inflation, as reflected in the World Economic Outlook (WEO) in October 2022, and major trading partners, such as China.
The manufacturing PMI has remained stable in expansionary zones in other countries, such as Thailand, recorded at 51.6 in October compared to 55.7 in September; Vietnam, 50.6 in October versus 52.5 in September; Australia, 52.7 in October versus 53.5 in September; and Japan, 50.7 in October versus 50.8 in September.
Meanwhile, several countries have recorded another contraction in their manufacturing PMI, including Malaysia (48.7), Taiwan (41.5), and South Korea (48.2).
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Translator: Astrid Faidlatul Habibah, Katriana
Editor: Sri Haryati
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