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• Enhance investment incentives to attract both local and Indonesia’s forest-based commodities can compete in higher-
foreign investors into modern, technology-driven wood- value international markets.
based manufacturing. In related news, it has been reported that the contribution
• Accelerate industrial tree plantation development and of the forestry sector to national economic growth in 2025
expansion to reduce dependence on natural forests and experienced a noticeable decline compared to previous years.
to secure long-term raw material supply. The Minister of Forestry, Raja Juli Antonnei, reported that

• Introduce targeted financing schemes and incentives to the sector’s contribution to GDP reached Rp97.22 trillion, down
support industry upgrading and sustainability compliance. from Rp129.57 trillion in 2024 and Rp130.12 trillion in 2023.
• Strengthen cross-agency cooperation to streamline approvals Data trends show steady growth from 2020 to 2023,
and reduce red tape and regulatory processes for plantation followed by a significant drop in 2025, highlighting a slowdown
and downstream industry development, while promoting in the sector’s overall economic impact.
digitalisation systems across government agencies to Investment in the forestry sector also fell sharply with
enhance inter-agency coordination and ensure a faster, upstream forestry investment declining to Rp13.6 trillion in
more efficient delivery system in Sabah. 2025 from Rp34.7 trillion in 2024 while downstream investment
• Support skills development programmes to prepare young in industrialisation reached Rp 36.6 trillion.

Sabahan workers for a modernised timber ecosystem. Non-tax state revenue from forestry also decreased to
Rp6.53 trillion from Rp8.12 trillion in 2024. However, the
INDONESIA furniture industry, as a labour-intensive downstream sector,
Forest product exports have stagnated delivers significant added value to the national economy.
The Ministry of Forestry has reported that forest product In the third quarter of 2025, the industry contributed
exports remain flat at around US$12 billion annually despite 0.92 percent to the non-oil and gas GDP while the export
expectations of three percent yearly growth. performance remained slightly better than the previous year.

Laksmi Wijayanti, Director General of Sustainable Forest The US continues to be the main export destination
Management, noted that the stagnation is influenced not only accounting for more than half of Indonesia’s furniture exports.
by production challenges but also by negative public narratives The handicraft sector also showed solid growth, supported by
surrounding forestry policies. the country’s rich natural resources and creative craftsmanship.
Issues such as carbon, forest rehabilitation and international Indonesia’s furniture and craft industry, which employs
trade politics often dominate public attention affecting perceptions more than 2.1 million workers and supports millions of
of the sector. She emphasised that Indonesia already has
strong sustainability regulations including the Timber Legality Burim
and Sustainability Assurance Program (SVLK).

To stimulate growth the ministry is now focusing on
downstream processing and increasing the value added to of
forest products. Current major exports include timber, pulp and
paper but the government aims to shift from exporting mostly
semi-processed materials to producing premium-quality goods.
Laksmi stated that efforts will expand beyond timber to
promote non-timber forest products as well, ensuring that