Ngeri! Ada Ancaman Dibalik Indonesia Deflasi 5 Bulan Beruntun

Summary

The transcript discusses Indonesia's ongoing deflation trend, which has continued for five consecutive months. The deflation, driven by lower prices in food, beverages, tobacco, and transportation, raises concerns about weakening consumer purchasing power. The decline in middle-class consumers and rising layoffs in the formal sector have led to increased informal employment and reduced consumer spending, particularly on secondary and tertiary needs. The speaker warns that this deflation, which reflects declining consumer confidence, could slow economic growth and impact government tax revenues, while also deterring investment in the country.

Takeaways

• 📉 Indonesia has experienced deflation for five consecutive months, with a confirmed deflation rate of 0.12% for September.
• 🍽️ Key contributors to the deflation are the food, beverage, tobacco, and fuel sectors.
• ⛽ The deflation in transportation (0.16%) is driven by fuel price adjustments, particularly non-subsidized fuel in September.
• 📊 This deflation may not be 'healthy' as it could indicate weakening purchasing power rather than increased production.
• 👥 The middle class in Indonesia has shrunk by 9.48 million people over the past five years, impacting economic growth.
• 🚫 Industrial layoffs have increased by 25% in 2023, with 53,000 workers losing formal jobs, pushing more into the informal sector.
• 💰 People are spending more on essentials like food and beverages (41.67% of total consumption), while cutting back on secondary and tertiary needs, including transport, entertainment, and shopping.
• 🚗 Car sales in the first half of 2023 dropped by 19.5%, reflecting a cautious middle class.
• ⚠️ The ongoing deflation signals a potential economic slowdown, as household consumption, which makes up 55% of Indonesia's GDP, continues to weaken.
• 💼 Long-term deflation could deter both domestic and foreign investment, affecting job creation and government tax revenues.

Q & A

What has been the trend in Indonesia's inflation over the past five months?

Indonesia has experienced deflation for the past five consecutive months, with September showing a deflation rate of 0.12%.

Which sectors have contributed the most to the recent deflation in Indonesia?

The primary contributors to the deflation were food, beverages, tobacco, and transportation, particularly due to adjustments in non-subsidized fuel prices.

Why is the recent deflation considered unhealthy according to the speaker?

The deflation is seen as unhealthy because it reflects a decline in consumer purchasing power rather than an increase in production. This is indicated by reduced spending, particularly by the middle class, which has shrunk significantly.

What impact has deflation had on Indonesia's middle class over the past five years?

The middle class in Indonesia has shrunk by approximately 9.48 million people over the last five years, weakening their role in driving economic growth.

What has been the effect of deflation on employment in Indonesia?

There has been a 25% increase in layoffs in the industrial sector from January to September, with formal sector job losses contributing to a rise in informal sector employment, which now constitutes 60.12% of the workforce.

How has deflation affected consumer spending in sectors like transportation and leisure?

As food and beverage costs rise, consumers have cut back on secondary and tertiary spending, including transportation, leisure activities, and shopping in malls. This has also impacted car sales, which dropped by 19.5% in the first half of the year compared to the same period last year.

What role does household consumption play in Indonesia's GDP, and how is it affected by deflation?

Household consumption accounts for nearly 55% of Indonesia's GDP. The decline in consumer confidence and spending, reflected in deflation, is expected to slow economic growth and hinder the government's GDP growth target of 5.1% to 5.2% for 2024.

What are the potential risks if Indonesia's deflation continues unchecked?

If deflation continues, it may further erode purchasing power, slow economic growth, reduce tax revenue (especially from VAT and corporate income tax), and discourage both domestic and foreign investment in Indonesia.

How does the current deflation situation compare to the 1997-1998 economic crisis in Indonesia?

The current situation differs from the 1997-1998 crisis, which was marked by high inflation and a currency crisis. Today, Indonesia's currency is relatively stable, but the concern lies in declining consumer purchasing power, which could hurt long-term economic growth if not addressed.

What might be the impact of ongoing deflation on investment in Indonesia?

If deflation persists and purchasing power continues to fall, investors may hesitate to expand their businesses or invest in Indonesia, which could further slow economic growth and reduce job creation.