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Don’t give up saving in 2025, financial planners urge
Economic uncertainty marks the beginning of a new year that could prove challenging for personal finances, advisors warn, requiring retail investors to stay on their toes.
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Tracking your expenses is the first step to managing your budget, financial planners say. (Shutterstock/eamesBot)
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conomic uncertainty marks the beginning of a new year that could prove challenging for personal finances, advisors warn, requiring retail investors to stay on their toes.
Finansia Consulting founder Eko Endarto, speaking to The Jakarta Post on Dec. 24, highlighted several issues that could disrupt personal cash flow in 2025, including the value-added tax (VAT) hike and mass layoffs.
The immediate future could make it harder for people to invest, he said, while rising prices would leave less money to be allocated to saving.
Similarly, Prita Hapsari Ghozie, CEO of ZapFinance, said the economic uncertainty brought about by the higher VAT and depreciating rupiah could threaten household spending and saving.
The Indonesia Economic Outlook 2025 report published recently by the Institute for Economic and Community Research at the University of Indonesia’s Faculty of Economics and Business (LPEM FEB UI) notes that while the VAT hike offers potential advantages in enabling the government to more reliably fund essential services, that comes with drawbacks.
“As a tax directly applied to goods and services, VAT risks exacerbating inflationary pressure. A higher VAT rate typically results in immediate price increases for goods and services, raising the overall cost of living,” the report states.
Moreover, its effect can be particularly challenging for low-income households, reducing their spending power and leading to a decline in overall consumption.
