INDEF says lower-middle-class purchasing power key to 2H economy
Economists urge the government to curb living costs and strengthen household incomes, warning temporary aid alone will not sustain demand.
Economist at the Institute for Development of Economics and Finance (INDEF) M Rizal Taufikurahman said purchasing power among the public, especially the lower-middle class, will determine Indonesia's economic growth performance in the second half of 2026. He urged the government to focus policy on protecting this group’s purchasing power in the third and fourth quarters. Measures he highlighted include controlling food inflation, providing more targeted assistance, transport incentives, and policies to reduce living costs. He said a consumption boost will not be enough if it relies only on temporary stimulus. According to Rizal, improvements should instead be directed at household income sources through formal job creation, limiting layoffs, raising real wages, and strengthening UMKM so consumption recovery is healthier and more sustainable.