Jakarta (ANTARA) - Economist from the Center of Reform on Economics\n(CORE) Indonesia, Dipo Satria Ramli, assesses that the public\u2019s\npurchasing power, which is closely linked to household consumption,\nneeds to be maintained to support economic growth in the second quarter\nof 2026.<\/p>\n
\u201cIn Q1, our growth was healthy, supported by government spending\nwhich led to an increase in consumption,\u201d Dipo said when contacted by\nANTARA in Jakarta on Wednesday.<\/p>\n
The Central Statistics Agency (BPS) previously reported that\nIndonesia\u2019s economy grew by 5.61% year-on-year in Q1 2026.<\/p>\n
Based on the exposition from the Coordinating Ministry for Economic\nAffairs, this growth was supported by household consumption growth of\n5.52% and government consumption of 21.81%, in line with increased state\nspending and various early-year stimuli.<\/p>\n
Dipo explained that Q1 economic growth was also supported by the\nmomentum of Ramadan and Eid al-Fitr, which boosted public consumption\nactivities.<\/p>\n
According to him, conditions in Q2 will differ as they will no longer\nbe supported by seasonal factors like those at the beginning of the\nyear.<\/p>\n
Therefore, he reminds the government to continue maintaining\nhousehold consumption so that the economic growth momentum persists.<\/p>\n
\u201cAlthough Q1 was healthy for us, there is indeed concern that in this\nsecond quarter we will face more reality,\u201d he stated.<\/p>\n
He said the domestic economic conditions still face several\nchallenges because public purchasing power is deemed not yet fully\noptimal.<\/p>\n
In addition, he mentioned that the number of the middle class, which\nhas been one of the main supports for household consumption and national\neconomic activity over the past five years, has experienced a downward\ntrend.<\/p>\n
\u201cThe middle class has declined by around 11 million people over the\npast five years,\u201d he revealed.<\/p>\n
According to him, this condition needs to be anticipated as it can\naffect industrial production costs and public consumption.<\/p>\n
He then warned that the impact of global uncertainties on the\nbusiness sector also needs to be anticipated, including the potential\nslowdown in industrial activity and the risk of layoffs (PHK).<\/p>\n
\u201cThere is concern from several surveys, such as from Apindo or KSPI,\nthat layoffs could possibly occur this year due to uncertainties in the\nbusiness sector,\u201d he said.<\/p>\n
Meanwhile, the government states it will optimise state spending to\nmaintain the economic growth momentum in Q2 2026.<\/p>\n
Coordinating Minister for Economic Affairs Airlangga Hartarto said\nthe government is preparing several stimuli, including the disbursement\nof the 13th-month salary for civil servants (ASN) around Rp55 trillion,\nacceleration of food assistance to 33.2 million beneficiary families,\nand energy subsidies and compensation in the 2026 state budget amounting\nto Rp356.8 trillion.<\/p>\n
Furthermore, Dipo assesses that the room for increasing government\nspending in Q2 is likely not as large as in the first quarter, so\nhousehold consumption needs to be continuously maintained as a support\nfor economic growth.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/economist-warns-to-maintain-purchasing-power-to-support-q2-economy-1778183868", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }