Surabaya — Chairman of the East Java Chamber of Commerce and Industry (Kadin Jatim), Adik Dwi Putranto, said the weakening of the rupiah exchange rate, which has reached Rp17,646 per US dollar, is beginning to place significant pressure on businesses and public purchasing power.

“The weakening rupiah has created multilayered impacts on businesses and the national industry. At least several major impacts are now being felt by business players, ranging from rising production costs to weakening industrial competitiveness,” Adik said in Surabaya on Thursday (May 21, 2026).

According to Adik, the increase in production costs has become the most immediate consequence of the rupiah’s depreciation. This is due to the high dependence of domestic industries on imported raw materials purchased in US dollars.

“Raw materials such as iron, steel, plastics, chemicals, and electronic components are still largely imported. Indonesia’s manufacturing industry is estimated to remain more than 70 percent dependent on imported raw materials,” he said.

Adik added that several sectors are among the hardest hit, particularly manufacturing, pharmaceuticals, automotive, and textiles. At the same time, business profit margins are being squeezed as production costs rise while product prices cannot immediately be increased in the market.

Beyond increasing production costs, the weakening rupiah has also reduced the competitiveness of national industries. Domestic products become more expensive in export markets, making them less competitive compared to products from other countries.

“Business players have started holding back raw material stocks and implementing production efficiencies because they are worried that public purchasing power will continue to weaken,” he said.

According to Adik, the prolonged condition could trigger the threat of layoffs if it continues while consumer purchasing power also declines.

“People’s income remains the same while the prices of goods continue to rise. This creates a purchasing power problem. In the end, businesses limit imports of raw materials and reduce production. If this situation continues, the threat of layoffs will persist,” he said.

As a survival strategy, Adik said many businesses are choosing to reduce profit margins rather than immediately raise product prices for consumers.

“Besides efficiency measures, businesses are probably reducing profits. So, they are holding off on raising prices for now, but lowering profits instead. However, that also cannot last too long,” he said.

Amid the pressure, Adik believes local products actually have the opportunity to become more competitive than imported goods, particularly agricultural products that rely on domestic raw materials.

“Products that are truly local can be more competitive than similar imported products. For example, orange and durian farmers can compete more strongly against imported products from abroad,” he said.

He added that East Java still has strong potential in the agriculture and livestock sectors.

“Agricultural and livestock products are also in surplus. That is one of East Java’s strengths,” he said.

However, Adik predicted that prolonged global economic turbulence would eventually affect regional economic growth.

“It will certainly be corrected. The economy is still performing well now, but if this condition lasts too long, economic growth will definitely be affected,” he said.

Therefore, he urged the government to reallocate the budget from programs considered to have limited immediate economic impact, such as the Red and White Village Cooperative (KDMP) development program, toward initiatives that can stimulate the economy and absorb more labor, such as infrastructure projects.

“The government must be willing to reallocate the budget. Infrastructure projects absorb labor and stimulate economic circulation,” he said.

In addition, Adik called on the government to strengthen social assistance programs to maintain public purchasing power amid economic pressures.

“What is most needed right now is social assistance and direct cash aid. That way, public purchasing power can recover and businesses will also be helped,” he said.

Despite the challenging global economic situation, Adik said he remains optimistic that the government has measures in place to maintain national economic stability.

“As businesspeople, we cannot think negatively or pessimistically. We trust the government, but we must also implement strategies to keep businesses running,” he concluded.