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Consumers cut spending as inflation bites household budgets
Soaring inflation has prompted consumers to pinch pennies, but the growing trend could eventually hurt the economy.
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A motorist transports vegetables purchased at a wholesale market in Jakarta on April 13, 2022. (AFP/Bay Ismoyo)
T
uti, a housewife and small-scale business owner in Bandung, West Java, is making drastic changes to her family’s budget to cope with rapidly rising inflation.
The soaring prices of flour, vegetables, eggs and other foodstuffs as well as fuel was difficult to bear, she said.
In July, inflation rose to 4.94 percent year-on-year (yoy), exceeding the Bank Indonesia forecast that the consumer price index would rise between 4.5 and 4.8 percent.
Tuti said the price of eggs in her area had jumped to Rp 32,000 per kilogram, up nearly 30 percent from a few months ago, while 12-kilogram canisters of liquefied petroleum gas (LPG) had risen 25 percent to Rp 232,000.
She added that the impending hike in the price of subsidized Pertalite gasoline would add to her family’s burden.
To balance her household finances, Tuti said, she was cutting down on secondary spending, including for activities like vacations, eating out and shopping for new clothes and durable goods, such as electronic devices, home appliances and furniture.
She was also switching to more affordable alternatives for the family’s primary needs.
