Mounting Instalments Squeeze Indonesians' Ability to Save

The financial health of Indonesian households is showing signs of strain as the portion of income set aside for savings declined, according to the Bank Indonesia (BI) Consumer Survey for May 2026. The survey revealed that the share of income allocated to savings fell to 17.5% from 18.2% in April 2026. This contraction occurred as the proportion of income spent on consumption rose slightly to 72.3% from 72.1%, and the portion used to service debt and instalments increased to 10.2% from 9.7%.

A breakdown by expenditure group shows the decline in savings was widespread. Households with monthly spending between Rp1 million and Rp2 million saw their savings ratio drop from 17.2% to 16.4%. The Rp3.1 million to Rp4 million group experienced a fall from 18.3% to 16.9%, while the highest spending group, above Rp5 million, recorded a decline from 19.2% to 17.5%. Only the Rp2.1 million to Rp3 million group saw a slight increase in savings.

This pressure on household saving capacity is mirrored in banking data. Total rupiah savings in the banking system fell to Rp2,904.2 trillion in May 2026, down from Rp2,914.6 trillion in April, a monthly decrease of approximately Rp10.4 trillion. In contrast, foreign currency deposits rose from Rp246.1 trillion to Rp260.9 trillion over the same period, marking a significant increase of Rp14.8 trillion. On an annual basis, rupiah savings grew by 7.3%, while foreign currency deposits surged by 29.9%, indicating a growing preference among the public and businesses to hold foreign currency amid ongoing pressure on the rupiah.