[FULL] Nasib Ekonomi Indonesia, Dompet Rakyat dan Negara 'Kering': Harus Bagaimana?

Summary

The video discusses the challenges facing Indonesia's economy, focusing on stagnant wages, declining public savings, and a drop in tax revenues. It highlights a rare deflation in February 2025, attributed to government subsidies on electricity prices, yet overall demand remains weak. Economists explain that the sluggish economy results from both supply-side interventions and a sharp drop in the middle class. The discussion explores how this impacts consumption and government revenue, and whether the government can sustain economic growth amid these issues.

Takeaways

• 😀 Deflation occurred in Indonesia for the first time in 25 years in February 2025, with an annual decrease of -0.09%.
• 😀 The deflation was significantly influenced by government subsidies, including a 50% discount on electricity tariffs, affecting essential goods prices.
• 😀 Key commodities that contributed to the deflation were electricity tariffs, chicken, onions, chili, tomatoes, and eggs.
• 😀 Despite the deflation, household purchasing power remains weak, as evidenced by the decline in the savings ratio, which reached its lowest level since the pandemic.
• 😀 The Indonesian government has faced a 41% drop in tax revenue in January 2025 compared to the previous year, highlighting fiscal strain.
• 😀 Workers' wages are stagnating or decreasing, leading to a lack of growth in household incomes and consumption.
• 😀 The ratio of household savings dropped to 14.7% in February 2025, signaling that Indonesians are increasingly dipping into their savings to survive.
• 😀 The middle class in Indonesia is shrinking, with 9.5 million fewer people classified as middle class in 2024 compared to 2019.
• 😀 The Indonesian economy has experienced a slowdown in demand, with less-than-expected purchasing activity in the first months of 2025, despite seasonal opportunities.
• 😀 Core inflation, a key indicator of purchasing power, has decreased, showing signs of a broader economic slowdown, although it remains higher than pre-pandemic levels.

Q & A

What is the main issue discussed in the Kompas Business segment?

The segment discusses the economic difficulties faced by both the public and the government in Indonesia, focusing on the decline in people's purchasing power, tax revenue, and the country's economic performance.

What caused the deflation observed in February 2025?

The deflation was primarily caused by the government’s discount on electricity tariffs, which resulted in a reduction of prices for essential commodities like electricity, chicken, onions, chili, tomatoes, and eggs.

What is the current state of the Indonesian people's savings rate?

The savings rate in Indonesia dropped to the lowest level since the pandemic, with the ratio of household savings falling to 14.7% in February 2025, down from 14.8% during the pandemic in 2021.

How did the Indonesian government's tax revenue perform in the first fiscal quarter of President Prabowo Subianto's term?

The Indonesian government's tax revenue in January 2025 fell by over 40% compared to the same month in the previous year, dropping from IDR 182.89 trillion to IDR 88.89 trillion.

What were the key factors contributing to deflation in early 2025?

Deflation in early 2025 was driven by a combination of government interventions, such as subsidies on electricity prices and an abundant harvest that reduced food prices, along with a lack of strong demand despite seasonal factors.

Why did economists express concern over the deflation in February 2025?

Economists were concerned because the deflation, particularly in February, contradicted the expected seasonal demand boost, indicating a significant weakening of consumer demand despite efforts to stabilize prices.

What impact did the decline in consumer purchasing power have on inflation and the economy?

The decline in purchasing power contributed to a slowdown in inflation, with core inflation dropping to 2.48%. This suggests that while there were price reductions in some sectors, overall economic activity remained sluggish due to reduced consumer spending.

How did the inflation rate in Indonesia compare to the previous years?

The core inflation rate of 2.48% in early 2025 was lower than the average core inflation rate of 3.11% between 2016 and 2019, reflecting a significant reduction in demand and economic activity following the pandemic.

What was the effect of rising gold prices on Indonesia’s inflation rate?

The rising gold prices contributed to the increase in core inflation, as demand for gold surged due to global economic uncertainty and as a short-term risk-hedging measure among wealthier Indonesians.

What does the decline in the middle class and their savings mean for Indonesia's future economic prospects?

The sharp decline in the middle class, from 57.3 million in 2019 to 47.8 million in 2024, reflects a structural weakening of consumer demand. This could have long-term negative effects on Indonesia’s economic growth unless there are significant policy interventions to support middle-class recovery and spending.