Kadin sees reduced household spending persisting next year
The Jakarta Post
The Chamber of Commerce and Industry (Kadin) says reduced household spending is likely to persist next year as people chose to save their money due to wariness over the economic condition and political uncertainty, with regional elections being held next year and a general election in 2019.
“It is certainly not healthy. It [political process] is too lengthy,” Kadin chairman Rosan Perkasa Roeslani said on Wednesday as reported by tempo.co.
Rosan said people would continue to save money until the economic and political situations stabilized.
As part of efforts to encourage people to spend money, he recommended the government temporary waiver added value tax.Read also: Gloomy retail industry under govt's watchful eye: Sri Mulyani
“I believe more people will go shopping with such an incentive,” he added.
The Central Statistics Agency (BPS) announced on Monday that household spending grew 4.93 percent year on year (yoy) in the third quarter compared to 4.95 percent yoy three months ago.
A Bank Indonesia survey in October also showed a similar trend, reflecting a lack of consumer optimism about the economy.
The BI survey showed a decrease in household spending to income ratio from 66.4 percent in September to 65.7 percent in October. A decrease was also seen in the loan installment-to-income ratio from 14.4 percent in September to 14.1 percent in October, while the savings-to-income ratio increased from 19.2 to 20.2 percent. (bbn)
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