JAKARTA, The Kabar News—Indonesia’s manufacturing sector recorded its strongest expansion in 31 months in October, while the government prepared cheaper loans for women from low-income households as part of its efforts to sustain economic activity.

Coordinating Economic Minister Airlangga Hartarto presented the latest indicators after President Prabowo Subianto chaired a limited cabinet meeting at the Merdeka Palace in Jakarta on Monday, Nov. 2.

The S&P Global Indonesia Manufacturing Purchasing Managers’ Index rose to 54 in October from 52.4 in September. The reading marked the highest level since March 2024. A figure above 50 indicates expansion, while one below that threshold signals contraction.

The increase reflected stronger domestic demand and faster growth in export orders. However, the PMI is a survey-based indicator of business conditions rather than a direct measurement of industrial production.

Industry Minister Muhammad Sarmuji said the rise reflected continued improvement in manufacturing activity. S&P Global data also indicated that new orders increased at their fastest pace in five years, according to Antara.

Indonesia recorded a trade surplus of US$3.36 billion in September. The cumulative surplus for January through September reached $10.61 billion, supported by a $34.21 billion non-oil and gas surplus that offset a $23.60 billion oil and gas deficit.

Exports in the first nine months of 2026 rose 5.58 percent year-on-year to $221.23 billion. Imports grew much faster at 19.67 percent to $210.63 billion.

The sharper increase in imports indicates stronger demand for raw materials and capital equipment, but it also narrowed the benefit generated by export growth.

Annual inflation reached 3.23 percent in October, while monthly inflation stood at 0.22 percent. Year-to-date inflation was 2.4 percent, according to a statement published by the Presidential Secretariat.

The annual rate remained within the government’s target range of 2.5 percent, plus or minus one percentage point. Volatile food products and transportation expenses contributed to price pressures.

“This shows that Indonesia’s economic fundamentals remain stable and strong this month. We expect the conditions to remain stable through the end of the year,” Airlangga said.

The government is preparing transportation discounts for the Christmas and New Year holiday period. Officials expect the incentives to support mobility and limit pressure on household travel expenses.

Separately, Airlangga led a coordination meeting on the implementation of the Kredit Perempuan Prasejahtera (KPPS) program. The scheme offers productive loans to women from low-income households at a flat annual rate of 8 percent.

Borrowers may obtain up to Rp15 million ($896) per loan agreement without additional collateral. The government established the scheme through Coordinating Economic Minister Regulation No. 7/2026, which took effect in August.

Eligible applicants must come from households in the first four groups of Indonesia’s national socioeconomic database. They must also join a community-based group comprising at least five members.

The government tested the scheme with approximately 2,000 PNM Mekaar clients before its wider rollout. It has allocated around Rp2.6 trillion to subsidize interest through the end of 2026. The subsidy reduces the rate paid by borrowers from 18 percent to 8 percent, according to the program’s implementation plan.

KPPS could cut the cost of financing for women with micro and ultra-micro enterprises. Success will depend on the right targeting and accessible business mentoring. Authorities should also ensure that cheaper loans boost borrowers’ income without creating unsustainable debt.