Investments To Contract In Indonesian Textile Industry
The Indonesian Textile Association (API) anticipates investments in the textile industry to contract in 2024, on expectations of the economic slowdown continuing in its key export markets.
According to Jemmy Kartiwa Sastraatmaja, Chairman of API, the worldwide economy is not in good shape and is forecast to weaken, while at the same time, interest rates would remain high.
“Therefore, investment will be very slow, whether domestic or foreign,” he was quoted as saying by Kontan.
Sastraatmaja added that the US Federal Reserve rate has been hovering between 5.25-5.5 percent and the US Central Bank will start reducing rates at the end of the second quarter of next year.
“The impact of the rate cut would start to be seen only from 2025, which will negatively impact purchasing powers of various importing countries,” he stated.
“This in turn would impact the capacity utilisation rate of the textile industry of various exporting countries, including Indonesia,” Sastraatmaja observed.
He pointed out that the capacity rate utilisation in the Indonesian textile industry currently stood at 50 percent, the lowest level since 2020.
Following a slowdown in global demand from its main export markets, Indonesia’s textile industry has been severally affected in 2023 leading to job losses for lakhs of workers.
