Indonesia’s Wealthiest Spend $20b per Year Shopping Abroad: Minister

JAKARTA, investortrust.id — Coordinating Minister for Economic Affairs Airlangga Hartarto revealed that Indonesia’s economy misses out on an estimated $20 billion, or Rp 324 trillion, annually due to the spending habits of the country’s 10 million wealthiest individuals, who frequently choose to shop abroad rather than domestically.

The minister based his estimation on the assumption that each wealthy individual spends an average of $2,000 on overseas purchases. 

“We calculate this conservatively at around $2,000 [per person],” Airlangga said during a press conference at his office in Jakarta on Friday, Jan. 17, 2025.

For comparison, total amount of the wealthy purchases was about two thirds of Indonesia's trade surpluses of $31 billion last year.  

Airlangga attributed this trend to competitive pricing abroad. Unlike Indonesia, some countries exempt certain goods from import duties and value added tax (VAT), making them cheaper for consumers.

“Compared to, say, Singapore, there is [virtually] no tax there. Automatically, goods here are more expensive than elsewhere,” he explained.

While Indonesia facilitates the importation of goods by simplifying procedures for businesses that pay import duties, income taxes, and VAT, the final retail prices still remain less competitive.

To counter this trend, the government aims to encourage the country’s wealthiest to shop domestically by creating a more appealing retail environment.

One example is the National Online Shopping Day (Harbolnas), which offers significant discounts and promotions. The 2024 Harbolnas, held from Dec. 10 to 16, generated a total of Rp 31.2 trillion in transactions, with an average spending of Rp 318,000 per person.

“This marked a 21.4% year-on-year increase. For Harbolnas 2024, the government had set a target of Rp 40 trillion in total transactions,” Airlangga noted.

By enhancing domestic shopping initiatives, the government hopes to retain more of this economic activity within Indonesia, fostering growth and reducing reliance on overseas markets.