06 Feb 2023 | News & Feature

Weakening consumption: a cautionary tale for the Indonesian economy

  • Domestic consumption appears to be weakening, courtesy of feeble consumer confidence amidst dwindling household liquidity. The weakening in consumption may not be too visible in the short term given the upcoming wage adjustments and high-spending season.
  • Still-ample liquidity may allow the government to intervene but substantial fiscal commitment for legacy projects may force the government to opt for more cost-efficient solution
  • The weakening consumption and more manageable monetary condition may put off BI’s subsequent rate hikes.