Economist: Rice Assistance Serves as Purchasing Power Buffer Amid Retail Slowdown

Jakarta (ANTARA) - Lead Economist at PT Bank Danamon Indonesia Tbk, Irman Faiz, assesses that rice food assistance can serve as a buffer for the purchasing power of low-income communities in the short term amidst a slowdown in retail sales growth.

According to him, fiscal support is increasingly being directed towards programmes targeting household purchasing power, particularly when the public faces food price pressures.

“Fiscal support is becoming more targeted towards household purchasing power. The extension of rice assistance serves as a primary buffer in the short term,” said Irman during a Bank Danamon Indonesia study in Jakarta on Monday.

The Danamon study noted that retail sales growth in August 2026 slowed compared to the previous month, particularly regarding broad public consumption.

“Retail sales growth slowed to 0.5 per cent year-on-year in August from 1.1 per cent in the previous month, with the weakening primarily visible in mass public consumption,” said Irmman.

Bank Indonesia (BI), in its Retail Sales Survey, forecasts that the Real Sales Index (IPR) for August 2026 will grow by 0.5 per cent year-on-year, slowing from the 1.1 per cent growth recorded in July 2026.

Irman believes this condition reinforces the importance of more targeted support for low-income groups, especially when food price pressures may narrow household spending capacity.

“Short-term policy support has been directed towards maintaining the consumption of low-income groups when food price pressures add strain to domestic demand,” he said.

In line with this, the government has decided to continue rice food assistance until December 2026.

For the October–December period, it is targeted that approximately 33.24 million food assistance recipients will receive an allocation of 10 kilograms (kg) of rice per month.

Recipients of this assistance are drawn from deciles 1 to 4, based on the National Socio-Economic Single Data (DTSEN).

Coordinating Minister for Economic Affairs Airlangga Hartarto stated on 8 September 2026 that the government has prepared a budget of approximately Rp17 trillion for rice assistance over the three months of the fourth quarter of 2026.

“The budget is around Rp17 trillion for rice assistance during these three months,” said Airlangga.

For the July–September 2026 period, the government tasked Perum Bulog to distribute approximately 997.2 thousand tonnes of rice to 33.24 million food assistance recipients. Each recipient receives 10 kg per month, or 30 kg for three months.

The National Food Agency (Bapanas) noted that with the extension until the end of the year, the total allocation of rice food assistance throughout 2026 could reach approximately 2.6 million tonnes. The food assistance programme in 2026 covers the periods of February–March, July–September, and October–December.

The government has positioned rice food assistance as one of the instruments to maintain public access to food while supporting the household needs of the beneficiary groups.