Taking the Advantage of Pent-up Demand

The pent-up demand in Indonesia has a different character from that in the US and China. In the US, people shop for durable goods, especially gadget and in China there is a more balance between durable goods and service

KOMPAS/HERU SRI KUMORO

Ari Kuncoro

The phenomenon of pent-up demand generally occurs after the economy suffers a crisis and people are returning to normal earlier patterns. People who experience regional quarantine will try to compensate for the time lost during quarantine.

There are three consequences. First, if the production side or supply chain cannot keep pace, high inflation will occur (Philips, 1956; Phelp, 1969). Another possibility is an import boom or inflation plus swelling imports. If the production side is ready, the pent-up demand can become a source of growth (Mayland, 1988).