Household consumption growth reached its lowest level in seven years. Data from the Central Statistics Agency (BPS) recorded that the Gross Domestic Product (GDP) at 2010 constant prices from the household expenditure component in 2017 amounted to Rp 5,379.5 trillion, growing only 4.95% year-on-year. This achievement is lower than in previous years.
The increase in the prices of fuel, telephone credit, food, and electricity tariffs triggered the slowdown in consumer growth. Households with lower-middle incomes were most affected by these price increases, compounded by increases in transportation costs and housing rents. Their income was unable to keep pace with the rising prices of goods and services, leading them to cut back on spending.
Meanwhile, high-income earners also restrained their spending. They preferred to save their money or invest it. This is what caused consumer growth to reach its lowest level since 2011.
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