Rising spending among the wealthy while middle-class consumption loses steam suggests overall purchasing power is failing to keep pace with GDP growth.
A customer passes by a rack of sweetened drinks in a supermarket in Jakarta on Dec. 14, 2023. (Antara/Cahya Sari)
Indonesia has recorded resilient economic fundamentals in the first six months of this year, but many households still grapple with weak spending power and depleted savings, according to the Jakarta-based think tank Centre for Strategic and International Studies (CSIS).CSIS researcher Deni Friawan said in a media briefing on Thursday that the country’s economic growth remained above expectations, even as the gross domestic product recorded in the second quarter deteriorated to 5.29 percent year-on-year (yoy) from 5.61 percent in Q1.
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The economic growth was mainly driven by consumption, government spending and investment amid weak exports. However, Deni said the expansion was not broad-based.
