# Indonesia consumer outlook: strengthened spending growth ahead as inflation eases - Link: https://www.thailand-business-news.com/economics/163543-indonesia-consumer-outlook-strengthened-spending-growth-ahead-as-inflation-eases - Published: 2024-10-04T09:34:00+07:00 - Author: News Desk Consumer confidence and retail sales growth in Indonesia are improving, signaling increased consumer spending potential in 2024 and 2025, driven by falling inflation and economic growth. ## Key takeaways * Consumer confidence and retail sales growth in Indonesia are on the rise again, suggesting positive prospects for consumer spending in 2024.  * Falling inflation is increasing purchasing power, while robust economic growth is leading to improved employment opportunities.  * The 2025 consumer spending outlook is positive due to a stronger rupiah, easing monetary policy, and lower inflation, boosting real wage growth. We expect a small deceleration in real consumer spending growth in Indonesia in 2024 to 5.0% y-o-y, as income growth remains muted, monetary policy remains tight and the currency weakens. However, this is still a solid figure that will be supported by the strong economy and boosted consumer purchasing power due to reduced inflationary pressures. Real consumer spending, measured at 2010 prices, is set to reach IDR7,012.6trn in 2024. ADVERTISEMENT In 2025, real consumer spending growth is forecast to accelerate to 5.2% y-o-y to take total spending (at 2010 prices) to IDR7,376.9trn. Inflation will ease further, which will allow for stronger real growth in household incomes. Interest rates will decline, reducing the pressure on indebted consumers and making credit-fuelled consumption more appealing. The rupiah will strengthen, lowering the cost of imported consumer goods and stimulating spending. Finally, the economy is expected to gather momentum on the back of the incoming president’s growth-supportive stance and plans to significantly loosen fiscal policy to raise government spending. As Indonesia’s economy navigates the complexities of post-pandemic recovery, consumer sentiment shows promising signs of improvement. With easing inflation rates, Indonesian households are feeling increasingly confident about their financial stability. This better economic outlook is anticipated to stimulate more robust spending growth as consumers become more willing to invest in both essential and discretionary goods. ### Related**Posts** ### 󠀁[Thai economy improved in September driven by exports and private investment](https://www.thailand-business-news.com/economics/337800-thai-economy-improved-in-september-driven-by-exports-and-private-investment)󠁿 ### 󠀁[Bank of Thailand Raises Growth Forecasts but Warns Recovery Remains Concentrated](https://www.thailand-business-news.com/banking/337755-bank-of-thailand-raises-growth-forecasts-but-warns-recovery-remains-concentrated)󠁿 ### 󠀁[Oil Prices Surge on Saudi Attacks, Raising Risks for Thailand’s Recovery](https://www.thailand-business-news.com/business/335915-oil-prices-surge-on-saudi-attacks-raising-risks-for-thailands-recovery)󠁿 ### 󠀁[Thailand Faces a New Economic Test Nearly 30 Years After Its IMF Rescue](https://www.thailand-business-news.com/economics/334123-thailand-faces-a-new-economic-test-nearly-30-years-after-its-imf-rescue)󠁿 Recent economic data indicates a trend toward stability in prices, allowing consumers to allocate a greater portion of their income toward spending. Lower inflation rates are not only reducing the cost of living but also encouraging a resurgence in sectors such as retail, dining, and travel. This renewed enthusiasm for consumer spending is pivotal for the country’s economic growth, as domestic consumption remains a cornerstone of Indonesia’s overall economic performance. To capitalize on this positive trend, businesses must adapt to changing consumer preferences and invest in innovative strategies to attract buyers. By embracing digital platforms and enhancing customer engagement, companies can effectively position themselves to benefit from the anticipated growth in consumer spending. [Read More](https://www.fitchsolutions.com/bmi/consumer-retail/indonesia-consumer-outlook-easing-inflation-will-support-more-robust-spending-growth-17-09-2024)