Consumer confidence and retail sales in Indonesia are rising, indicating robust spending potential for 2024-2025 due to falling inflation, economic growth, and favorable monetary policy, despite slight deceleration in 2024.
Improving Consumer Confidence
Consumer confidence and retail sales in Indonesia are showing signs of improvement, pointing to a brighter spending outlook for 2024 and 2025. This rise is primarily driven by declining inflation, which enhances purchasing power, and robust economic growth, fostering better employment opportunities. Strengthening consumer sentiment suggests that households are poised to increase their spending on both essential and discretionary items.
Future Spending Projections
Real consumer spending growth is expected to slow slightly to 5.0% year-on-year in 2024, reaching IDR7,012.6 trillion. This growth will remain supported by a strong economy, despite tighter monetary policies and muted income growth. By 2025, spending is projected to gather pace at 5.2% year-on-year, benefiting from a stronger rupiah and lower inflation, which together will push real household incomes higher.
Adapting Business Strategies
As consumer spending gains momentum, businesses must adapt to evolving preferences and invest in innovative strategies. Embracing digital platforms and enhancing customer engagement will be crucial for companies aiming to capitalize on the forecasted growth in consumer spending, ensuring they are well-positioned to thrive in this improving economic landscape.
Source : Indonesia consumer outlook: strengthened spending growth ahead as inflation eases
