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Jakarta Post

Indonesia'€™s consuming class to double

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Wed, February 19, 2014   /  06:54 am

Indonesia'€™s consuming class '€” people whose daily spending ranges from US$2-$10 '€” will double to 150 million people over next 10 years, ANZ-Roy Morgan Research predicts.

ANZ-Roy Morgan, which interviewed 2,010 respondents in 22 big cities and 22 small towns across the country, concluded that private consumption would be the main driver behind the establishment of Indonesia as a globally important economy.

 '€œThe rapidly emerging consuming class will be a significant stabilizer of Indonesia'€™s economic development,'€ said ANZ Asia Pacific chief economist Glenn Maguire at the launch of the research report on Tuesday.

Even though the domestic consumer confidence index rose by only 0.5 points to 151.5 points in January from last December, the rise was still significant as it was driven by the public'€™s higher confidence in their own financial situation as well as the economy in next five years, Maguire added.

'€œWe also belive that consumer confidence is rising as the Indonesian economy is avoiding disruptions from the  US Federal Reserve tapering and continues to grow,'€  he said.

ANZ-Roy Morgan said that the fact that 60 percent of Indonesia'€™s 250 million people were 20 to 65 years old '€” three times South Korea'€™s entire population '€” was positive for the economy.

Twenty-seven percent of Indonesia'€™s total population, Maguire added, was below 15 years old people: an enormous potential for labor productivity.

Investment Coordinating Board (BKPM) chairman Mahendra Siregar, who attended the launch of the report, lauded the high consumer confidence but underlined that the confidence should be turned into increased investment.

'€œOnce consumer confidence drives investment, the economy will become more sustainable,'€ Siregar added. 

Siregar quoted a survey by Japan Bank for International Cooperation (JBIC) as concluding that Indonesia had been the most promising country for overseas business in 2013, even more attractive than India, which ranked second; Thailand, third; and  China, fourth. (alz)

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