Keeping up the roar of the middle-class consumption
In line with the control of the pandemic, national consumption began to rise. This is reflected in the increase in the Consumer Confidence Index at the end of 2021
It is extraordinary because the Consumer Confidence Index (IKK) in December 2021 was recorded at 118.3. This figure is above the pre-pandemic level in February 2020 of 117.7. Apart from consumer optimism, signs of strengthening consumption activity are also reflected in banking data in the form of the saving to income ratio. This increase in public spending is of course a breath of fresh air for the prospect of domestic economic growth. Moreover, we know that as an upper middle income country, the driving force for domestic economic growth is household consumption. However, normalization of consumption in 2022 also faces a number of challenges, ranging from the outbreak of the Omicron variant, the risk of inflation, to cutting incentives. In fact, the increasingly roaring wheel of consumption over the past year is the fruit of incentives disbursed by the government, especially related to the social protection cluster. In fact, the middle class has a better ability and willingness to consume than the lower class who have low purchasing power or the upper class who tends to hold back on spending. State tax policy makers are currently formulating details of the ideal types of incentives to encourage public consumption. The government may need to expand the scope of recipients of social assistance this year. The purchasing power of the middle class is expected to be able to compensate for the pressures faced by the lower class who are quite vulnerable in line with the increasing risk of a spike in inflation.
|•SOURCE•| Articles :KOMPAS | Image :SINDONEWS |
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