People’s Purchasing Power Is Still Strong


Bank Indonesia (BI) recently submitted its survey report. The Bank Indonesia Consumer Survey revealed that consumer optimism about the current economic conditions remains strong. This is reflected in the Current Economic Index (IKE) in August 2022 of 111.7 or higher than 110.9 in July 2022.

Head of the BI Communications Department Erwin Haryono revealed that the increase in IKE in August 2022 was driven by an increase in all of its constituent components and the highest was the Current Income Index, which increased by 1.6 points to 119.8 in August 2022.

Meanwhile, the Durable Goods Purchase Index also increased by 0.3 to 112.2 and 103.1, respectively.

“Along with increasing consumer confidence in increasing income, consumer confidence in purchasing durable goods is also indicated to increase compared to the previous month,” Erwin said in a press release, Thursday (8/9/2022).

The increase in the durable goods purchase index occurred in some of the respondents’ expenditure levels, the highest for respondents with expenditures of Rp. 4.1-5 million per month.

According to Erwin, the index for purchasing durable goods was also observed to increase in most age categories of respondents, especially those aged 20-30 years.

Furthermore, Bank Indonesia also noted that the August 2022 Consumer Survey indicated that consumer optimism for economic conditions had increased from the previous month.

This is reflected in the August 2022 Consumer Confidence Index (IKK) of 124.7, higher than 123.2 in July 2022, as well as consistently remaining in the optimistic zone (IKK>100).

Meanwhile, stronger consumer expectations for future economic conditions were mainly supported by expectations for business activities and expectations of job availability which were recorded at 138.8 and 136.2, respectively, higher than 133.5 and 134.5 in July. 2022.

BI also noted that earnings expectations for the next 6 months are relatively stable compared to the previous month and maintained at an optimal level of 138.2.

Regarding the increase in fuel oil prices, Secretary of the Central Executive Board of the Indonesian Market Traders Association (IKAPPI) Reynaldi Sarijowan said that people’s purchasing power fell 37 percent after the increase in the price of pertalite, diesel, and pertamax fuels. The decline in purchasing power is troubling market traders throughout Indonesia.

“We are trying to take possible steps and efforts to keep our traders from collapsing. We have experienced a hard wave during the COVID-19 pandemic, coupled with the increase in fuel prices, this will have a fatal impact on the level of the economic decline of market traders throughout Indonesia. ,” Reynaldi said in an official statement, Tuesday (6/9).

IKAPPI hopes that the government will revoke the increase in fuel prices or take other possible measures to ease the burden on market traders.