Consumer Purchasing Power Shows No Signs of Improvement

Data from the Central Statistics Agency (BPS) shows that Indonesia's economy in the third quarter of 2017 remained stagnant, growing only 5.06 percent compared to the same quarter of the previous year. Compared to the second quarter of 2017, the domestic economy grew only 3.18 percent.

Consumer purchasing power has also not shown improvement. This is reflected in the growth of Household Consumption (RT) in the third quarter of this year, which grew only 4.93 percent compared to the same quarter of the previous year. This growth is lower than the second quarter of 2017, which grew by 4.95 percent. Indeed, RT consumption has grown below five percent since the fourth quarter of 2016.

Consumer purchasing power shows a decline. This is in line with the decrease in RT consumption among lower-middle-class consumers due to rising prices of goods and services, while income has not increased and tends to decrease. Meanwhile, upper-middle-class consumers are adopting a wait-and-see attitude, holding back on purchases. For information, in the expenditure-based GDP structure at current prices, consumption expenditure accounts for 55.68 percent.