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Jakarta Post

[ANALYSIS] 2021 consumer spending: Will it recover solidly?

  • Andry Asmoro

    The Jakarta Post

PREMIUM
Jakarta   /   Tue, January 12, 2021   /  06:46 pm
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A butcher checks his phone while waiting for buyers at the West Tebet Market in South Jakarta.(JP/Seto Wardhana)

Indonesia’s consumers have long been known as some of the most promising in the world. In a 2013 report, McKinsey stated that some 90 million Indonesians would join the consumer class by 2030, more than in any emerging nation save for China and India, and that that would mean an additional US$1 trillion in annual spending. Indonesia’s consumer spending contributes around 54 percent of the nation’s total gross domestic product (GDP) and has been the backbone of the economy during the pandemic. Despite its huge potential, consumer spending was hit severely by the COVID-19 outbreak, the first time since the 1998 Asian financial crisis. Consumer spending contracted in the last two quarters of 2020 by around 4.75 percent year-on-year (yoy), mostly due to large-scale social restrictions (PSBB), which started in the second quarter. This policy had a negative on hotels, rest...