Raising People’s Purchasing Power

The common challenge is how to raise household spending, which is determined by the people\'s purchasing power.

KOMPAS/TOTOK WIJAYANTO

A woman shops on Sunday (9/2/2020) at a supermarket in Bintaro, South Tangerang, Banten. Consumer spending grew 5.04 percent in 2019, a year-on-year decrease of 0.01 percent. The government needs to take extra precaution in issuing policies that do not affect consumer purchasing power.

Consumer confidence weakened again in July 2021 amid the dominating role of household spending in supporting economic growth.

Bank Indonesia (BI) reported that its Consumer Confidence Index (IKK) dropped to 80.2 in July, marking a return to pessimistic territory. A month earlier, the IKK reached 107.4, well above the threshold of 100. Strict mobility restrictions imposed by the government since July 3 to break the chain of Covid-19 transmission put pressure on the consumer index. (Kompas, 12/8/2021).