Consumer Caution Rises, Bank Mandiri Warns of Shifting Spending Behavior
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JAKARTA, investortrust.id — Indonesian consumers are increasingly delaying purchases, relying more on holiday bonuses, and opting for lower-cost goods—shifts in behavior that Bank Mandiri warns could pose long-term risks to economic growth. The bank’s economists are urging policymakers to respond, as this cautious spending pattern begins to weigh on household consumption, the country’s key growth driver.
Findings from the April 2025 edition of EconMark, Bank Mandiri's macroeconomic report, show that household consumption—long the main engine of Indonesia's GDP—has yet to fully recover to its pre-pandemic levels.
Chief Economist Bank Mandiri Andry Asmoro said that household consumption declined from an average of 54.3% of GDP before the pandemic to 52.7% afterward, and remains 6.7% below its potential. "This reflects a structural gap that has yet to be resolved," he said.
During the 2025 Ramadan period, the bank observed three emerging trends in consumer behavior: delayed purchases, higher reliance on holiday bonuses (THR), and a preference for more affordable goods. Despite an uptick in spending during the latter half of Ramadan, overall consumption growth stood at 11.2%, slightly below last year’s 12.1%.
The widening savings gap during this year’s Ramadan period, Bank Mandiri noted, may also signal that the overall value of THR received in 2025 was lower compared to the previous year.
The report also highlighted a change in holiday mobility patterns. Consumers opted for nearby destinations and public transport, boosting local tourism in cities like Bogor and Bandung, while long-haul destinations such as Bali experienced slower growth. "These patterns reflect a more prudent and value-conscious consumer mindset," Andry said.
More broadly, Indonesia’s retail sector remains under pressure. Sales are stagnating, competition is intensifying, and retailers are struggling to adapt to shifting consumer demand. At the same time, Andry warned that looming U.S. tariffs may put further strain on exports and employment, with disproportionate effects on lower- and middle-income households.
Nevertheless, Andry emphasized that there are opportunities even in this cautious climate. Companies can maintain competitiveness by resizing products, adjusting pricing, and focusing on essential goods. “Policy support aimed at sustaining household consumption and labor resilience will be crucial to maintain growth momentum in an economy that is increasingly cautious and value-oriented,” he concluded.