Lower-Middle Class Purchasing Power Key to Second-Half Economic Growth, Says Economist

An economist from the Institute for Development of Economics and Finance (INDEF), M Rizal Taufikurahman, has assessed that public purchasing power, particularly among the lower-middle class, is a key factor in maintaining national economic growth performance in the second half of 2026. “In the third and fourth quarters, the government needs to focus on maintaining purchasing power, especially for the lower-middle group,” Rizal said in Jakarta on Monday (10/8/2026). In the second quarter of 2026, Statistics Indonesia (BPS) announced that household consumption grew by 5.06 percent year-on-year (yoy). This growth slowed compared to the first quarter of 2026, which recorded 5.52 percent yoy. According to Rizal, the slowdown in household consumption in the second quarter warrants attention because consumption remains the main pillar of economic growth, contributing 2.67 percent to the national economic growth rate of 5.29 percent yoy. When consumption weakens while national economic growth remains around 5 percent, Rizal explained, it means the sources of growth are starting to rely more on other components such as investment and government spending. Therefore, efforts are needed to boost household consumption performance for the remainder of the year. He highlighted several measures, including controlling food inflation, providing more targeted assistance, offering transport incentives, and implementing policies that reduce the cost of living.