On 7th December 2017, Perbanas Institute held a discussion panel on the current outlook of the Indonesian economy at its campus in Jakarta. Themed, ‘Decreasing Purchasing Power: Just Politics or a Reality?’, the panel debated on whether consumer purchasing power is declining or if it is the result of political rumours from factions looking to influence the 2019 presidential elections. Present at the event included Dr Rizal Ramli as the former Coordinating Minister for Maritime Affairs of the Republic of Indonesia, Mr Zulkifli Hasan as the Chairman of the People’s Consultative Assembly, Rector of Perbanas Institute Prof. Dr. Ir. Marsudi Wahyu Kisworo, and Mr Donny Imam Priambodo as a member of Commission IX of the People’s Representative Council.
The event highlighted the recent closures of local modern retail outlets — particularly those in the FMCG sector — as a sign of decreasing consumer purchasing power. Most notably Matahari department stores have had to close a number of their outlets throughout Jakarta due to a reduction in sales. Furthermore, weak sales during this year’s Idul Fitri period in addition to the discontinuation of international brands Debenhams, Lotus and Seven Eleven in Indonesia, have also been viewed as indicators of sluggish economic growth.
The government, however, has argued that it is due to changing consumer spending patterns that have contributed to the recent slowdown in growth amongst retailers. The shift towards e-commerce platforms and speciality stores, especially amongst the middle-class, has affected many businesses that continue to operate offline. Moreover, Indonesia's burgeoning millennial generation are spending less on durable goods like cars, or furniture, and more on lifestyle experiences such as travelling, and are thus influencing consumption habits.
Through this event, Perbanas Institute has demonstrated its forward-thinking approach to providing its students unparalleled industry insights. As such, to maintain pace with increasing regional competitiveness, the institute plays a key role in meeting national demand for qualified professionals with the in-depth understanding of economics and finance.