Latest news with #Rohatta
South China Morning Post
7 days ago
- Business
- South China Morning Post
Indonesia's economy is up, so why are its people down?
Indonesia 's economy is growing at its fastest pace in two years. Not all consumers are buying it. Advertisement Rohatta, owner of a fried rice restaurant on the outskirts of the capital, Jakarta, says his business is having its worst spell since the pandemic, with 50 to 70 customers a day – down from 150. 'When they do come, they order fewer items. No drinks, no desserts,' he said. He has cut prices by about 20 per cent and added a less expensive rice bowl option to attract customers. Indonesians are using new buzzwords to describe the pared-back lifestyle: 'Rojali,' a name for shoppers who rarely buy, and 'Rohana,' for people who inquire at shops but never really hit the checkout. That is peeving the government. 'The issues of Rohana and Rojali are being blown out of proportion,' Coordinating Minister for Economic Affairs Airlangga Hartarto said at a briefing late on Tuesday, after the government said growth jumped to a stronger-than-expected 5.12 per cent in the second quarter, partly on a 4.97 per cent gain in consumption. 'The facts are not as such.' A saleswoman checks her phone in a quiet shopping mall in Depok, Indonesia, on Tuesday. Photo: EPA But consumer goods giant Unilever Indonesia and fashion retailer Matahari Department Store both saw sales shrink in the first half of 2025, while instant noodle maker Indofood CBP Sukses Makmur eked out sales growth of just 1.7 per cent.
The Star
7 days ago
- Business
- The Star
Penny-pinching consumers cast doubt on Indonesia's high growth
JAKARTA: Indonesia's economy is growing at its fastest pace in two years. Not all consumers are buying it. Rohatta, owner of a fried rice restaurant on the outskirts of the capital, Jakarta, says his business is having its worst spell since the pandemic, with 50-70 customers a day - down from 150. "When they do come, they order fewer items. No drinks, no desserts,' he said. He's cut prices by about 20% and added a less expensive rice bowl option to attract customers. Indonesians are using new buzzwords to describe the pared-back lifestyle: "Rojali,' a name for mall-goers who rarely buy, and "Rohana,' for people who inquire at shops but never really hit the checkout. That's peeving the government. "The issues of Rohana and Rojali are being blown out of proportion,' Coordinating Minister for Economic Affairs Airlangga Hartarto said at a briefing late Tuesday (Aug 5), after the government said growth jumped to a stronger-than-expected 5.12% in the second quarter, partly on a 4.97% gain in consumption. "The facts are not as such.' But consumer goods giant PT Unilever Indonesia and fashion retailer PT Matahari Department Store both saw sales shrink in the first half of 2025, while instant noodle maker PT Indofood CBP Sukses Makmur eked out sales growth of just 1.7%. Foot traffic in malls nationwide was up about 10% in the first half of the year, but sales haven't kept pace, said Alphonzus Widjaja, chairman of the Indonesia Shopping Center Association. "Shopping patterns have changed,' he said. "People only buy items with low prices because they have limited funds.' Big-ticket purchases have suffered too. Sales of motorcycles - many households' main form of transport - fell 2% in the first half of the year, while car sales slipped 8.5%. Car sales were so rare in June that neighbouring Malaysia, a country with one-eighth the population of Indonesia, sold more. The picture of reduced spending is worrying for a country of more than 280 million people whose economy is driven in large part by high rates of consumption. It also poses a test for President Prabowo Subianto, who is seeking support for his plans to remake Indonesia into an energy- and food-sufficient nation. A signature pledge is to supercharge growth to 8%, a rate not seen in a generation. But Tuesday's economic data raised eyebrows among some analysts. "The strength in household spending defies our observations,' DBS Bank Ltd. analysts said in a research note after the data release. Its consumption gauge, along with lending and some high frequency data, points to underlying caution and softness, they said. "I would take this apparent semblance of stability with a large pinch of salt,' said Pantheon Macroeconomics economist Miguel Chanco. What appears to be a spending slump is "absolutely concerning from our vantage point and, don't forget, from the government's likely perspective as well.' Preserving Indonesians' spending power is expected to be a key theme as Prabowo gives his first State of the Nation Address and unveils the 2026 state budget later this month. His administration is preparing its third stimulus package this year, coming after a US$1.5 billion package of salary and social aid top-ups as well as toll discounts rolled out in June. But those measures may have a limited effect. Some analysts point to lower commodity prices sapping the earnings of the millions of Indonesians working in the palm oil or coal sectors. Others cite factors like still-high interest rates and banks that are reluctant to lend. The concern is that the reasons go beyond Indonesia's usual boom-and-bust cycles and are longstanding problems taking their toll. Chief among them is the shortage of secure, well-paying work for Indonesians. More than 42,000 workers were officially laid off in the first half of this year, up 32% from a year ago, according to the Ministry of Manpower. Analysts say the actual number is likely much higher. New jobs are being created, but often in the informal sector, with people opening food stalls or working as delivery riders, roles typically inadequate to replenish savings that were drained by the pandemic. "Underemployment is elevated and - amid an uncertain labour market outlook - households are approaching spending decisions with caution,' said Krystal Tan, an economist at ANZ Group Holdings Ltd. A recent survey by NielsenIQ showed fewer Indonesians feel financially secure, and 83% of respondents were actively seeking additional income beyond their main job. More than a fifth said they're likely to take on more debt to maintain their lifestyle. Between 2019 and 2024, nearly 10 million people fell out of the middle class, which accounts for bulk of consumption and taxation but is rarely the target of stimulus programs. The simple answer to creating higher incomes, over time, is investment, said HSBC Holdings Plc economist Pranjul Bhandari. "Only when investment rises, does the capacity of an economy to create jobs grow,' she said, suggesting that the government enact reforms to boost infrastructure and trade, streamline regulations and develop a skilled workforce. "It's that 'now or never' moment,' she said. Farida, a researcher in Jakarta, has seen friends laid off and watched her favourite restaurant close. With a child to raise, she and her husband have stopped buying new clothes and eating out. "We have a decent amount of savings now, but it still doesn't feel enough,' she said. "I feel a sense of gloom.' - Bloomberg
Bloomberg
7 days ago
- Business
- Bloomberg
Penny-Pinching Consumers Cast Doubt on Indonesia's High Growth
By , Grace Sihombing, and Prima Wirayani Save Indonesia's economy is growing at its fastest pace in two years. Not all consumers are buying it. Rohatta, owner of a fried rice restaurant on the outskirts of the capital, Jakarta, says his business is having its worst spell since the pandemic, with 50-70 customers a day — down from 150.
