Indonesian Household Debt Repayments Rise: Salaries Stretched, Pocket Money Cut

Bank Indonesia’s latest release shows consumer financial conditions are beginning to experience pressure. This is evident from the increasing portion of income used to pay instalments or debts, whilst the portion of income saved has declined.

In May 2026, the portion of income used for consumption was recorded at 72.3 per cent, relatively stable from the previous month’s 72.1 per cent. However, the burden of instalments or debt increased. The portion of income used to pay instalments rose to 10.2 per cent, from 9.7 per cent in April 2026. Conversely, the portion of income saved fell to 17.5 per cent, from 18.2 per cent previously.

This condition indicates that household financial space is beginning to narrow. Consumer income is still largely absorbed by consumption, whilst the instalment burden increases and the ability to save decreases.

When broken down in more detail by expenditure group, the pressure is visible with varying patterns. Not all groups experienced a simultaneous increase in consumption, a rise in instalments, and a fall in savings. However, in general, this data indicates a change in the way the public manages its income.

For the expenditure group of Rp1 million to Rp2 million per month, the consumption portion rose quite sharply. In May 2026, the portion of income used for consumption was recorded at 76.7 per cent, up from 74.6 per cent in April 2026. This consumption figure is the highest throughout 2026. This shows that the income of the lower group is increasingly absorbed by consumption needs. At the same time, the savings portion fell to 16.4 per cent, from 17.2 per cent previously. This position is the lowest throughout 2026, indicating that the saving space for the lower group is increasingly narrowing. Interestingly, the instalment or debt portion for this group actually fell to 6.9 per cent, from 8.2 per cent the previous month.

A different pattern is seen in the expenditure group of Rp2.1 million to Rp3 million per month. In this group, the consumption portion actually fell, from 74.1 per cent in April 2026 to 72.6 per cent in May 2026. The instalment or debt portion was recorded stable at the level of 9.3 per cent. Meanwhile, the savings portion increased quite significantly to 18.1 per cent, from 16.7 per cent previously. Thus, this group has not shown the same pressure as the total group.

Pressure is again visible in the expenditure group of Rp3.1 million to Rp4 million per month. The consumption portion of this group rose to 72.2 per cent in May 2026, from 70.0 per cent the previous month. This increase in consumption caused the saving space in this group to also decline. The portion of income that could be saved fell to 16.9 per cent from 18.3 per cent previously. However, there is a positive side. The instalment portion for this group actually fell to 10.9 per cent, from 11.7 per cent the previous month.

In the expenditure group of Rp4.1 million to Rp5 million per month, the movement is relatively more stable. The consumption portion fell slightly to 70.7 per cent in May 2026, from 71.1 per cent previously. Even though the monthly decline is slight, this consumption level is the lowest since August 2024. On the other hand, the instalment or debt portion rose to 10.7 per cent, from 10.3 per cent the previous month. This increase in instalments indicates an additional debt payment burden in this group. Nevertheless, the savings portion of this group still edged up to 18.7 per cent, from 18.6 per cent in April 2026.

The clearest pressure from the instalment side is visible in the expenditure group above Rp5 million per month. The portion of income used to pay instalments jumped to 12.8 per cent, from 10.9 per cent in April 2026. At the same time, the savings portion of this group fell quite deeply to 17.5 per cent, from 19.2 per cent previously. This decrease in savings is one of the largest compared to other expenditure groups. Meanwhile, the consumption portion for this group actually fell slightly to 69.7 per cent, from 69.9 per cent. This indicates that the pressure on the upper group does not come from an increase in consumption, but rather from the rising burden of instalments or debt.

Overall, Bank Indonesia data shows that changes in consumer financial conditions are not occurring uniformly across all expenditure groups. There are groups that are still able to increase savings, but there are also groups that are starting to lose saving space because of increasing consumption or instalments. In the total group, pressure signals remain visible from the rising portion of instalments and the falling portion of savings.