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Indonesia's domestic consumption continues to slow
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Heavy discounts: A woman walks past a sales sign in a shopping mall in Jakarta. (JP/Wienda Parwitasari)
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fter Ramadhan and Idul Fitri in the middle of the year, domestic consumption has kept slowing as middle-class consumers have hit the brakes on spending, a researcher says.
Indonesia Retailers Association (Aprindo) expert staff member Yongky Surya Susilo said that normally consumer goods consumption grew 10 percent year-on-year (yoy). However, after August it kept decreasing until it dipped below 6 percent yoy in October.
"Mainly because the middle class do not shop as often or as much as before," Yongky said at a Center of Reform on Economics (CORE) Indonesia media briefing in Jakarta on Tuesday.
He said producers were also less expansive and had, among other things, held back on adding more distribution channels and launching new products.
"I think most companies have used their money for the tax amnesty and delay expansion," Yongky said.
Despite the upcoming Christmas-New Year festive season, Yongky was pessimistic, citing recent unstable political and security conditions. He predicted consumption growth in December to be no more than 8 percent yoy.
"People will be less inclined to go to a mall, and those who can go abroad for the Christmas holiday, both of which will reduce domestic spending," he said. (evi)
