Jakarta (ANTARA) - Economist from the Institute for Development of Economics and Finance (Indef) Esther Sri Astuti has projected changes in public consumption trends ahead of Ramadan and Eid al-Fitr 2025.
Ramadan and Eid al-Fitr will still be welcomed with enthusiasm, but there will be a decline in purchasing power, Astuti stated when contacted by ANTARA via telephone on Thursday.
"Eid al-Fitr will still be welcomed with enthusiasm, but people will balance it with their financial situation. They will still go back to their hometowns, and so on, but they will have different ways to celebrate Eid al-Fitr and Ramadan," she remarked.
Astuti highlighted that recent political and economic upheavals in Indonesia have contributed to the decline in purchasing power.
Additionally, she attributed this weakening trend to a shrinking middle class.
According to data from Statistics Indonesia (BPS), the middle-class population in Indonesia fell from 57.33 million in 2019 to 47.85 million in 2024.
This decrease of 9.48 million people reflects a downward economic shift that could further weaken the country's economy.
"Purchasing power is indeed declining, as seen in the 9-10 million reduction in the middle class," Astuti pointed out.
"On the other hand, we see that the price increase is faster than the wage increase. This makes our real income decrease. It means the value of our money decreases," she stated.
"Moreover, we are seeing budget efficiency measures and other financial constraints, and unfortunately, the middle class is among those most affected," she remarked.
In the meantime, Chairman of the Strategic Socio-Economic Cadre Association (AKSES) Suroto assessed that fluctuations in the people's purchasing power are heavily influenced by government policies, such as those related to wage increases for workers.
"The increase in labor wages directly affects the people's purchasing power. However, I think our government is too conservative in increasing labor wage policies," he remarked.
"As a result, over the past decade, the lower-income population has experienced a relatively heavier financial burden," he noted.
Economist projects changes in consumption trends ahead of Ramadan 2025
Kamis, 27 Februari 2025 13:50 WIB
A trader serves a customer at Subuh Market, Ciamis District, West Java, Friday (2/21/2025). Several traders said that ahead of Ramadan, the prices of several basic necessities in the traditional market had increased. ANTARA FOTO/Adeng Bustomi/nym.
