Indonesian Government Pledges Support for Furniture Industry

Addressing Key Challenges

The Indonesian furniture industry is facing significant challenges, including increasing competition from imports, particularly from countries like Vietnam that offer lower interest rates for businesses. In response, Finance Minister Purbaya Yudhi Sadewa has committed to supporting the sector through various government-backed financial initiatives ¹

Role of LPEI in Industry Support

Purbaya highlighted that Indonesia's Export Financing Agency (LPEI) will play a crucial role in providing financial assistance to local furniture manufacturers. Currently, LPEI's disbursed funds stand at only Rp 200 billion, significantly below its potential capacity of Rp 16 trillion. The minister has promised to review and enhance LPEI's financing capabilities to better support the industry ¹

Industry Concerns and Government Response

Business leaders from the Indonesian Chamber of Commerce and Industry (Kadin) met with Purbaya to discuss the sector's challenges. Key concerns included shrinking trade surplus due to increased imports and pressure from import tariffs imposed by countries like the United States. The discussions centered on potential deregulation measures and financial incentives to help local manufacturers remain competitive ²

Path Forward

The government is exploring multiple avenues to support the furniture industry, including enhanced financing through LPEI and regulatory incentives. These measures aim to improve the sector's competitiveness in both domestic and international markets. The finance minister's commitment to reviewing LPEI's capabilities signals a proactive approach to addressing the industry's financial challenges.