Consumer spending in Indonesia to see ‘strong growth’ in 2022
But it will slip slight in 2023.
A strong growth in consumer spending is expected in Indonesia this year as it becomes less likely for pandemic-related restrictions to be reimposed, Fitch Solutions reported.
In 2022, Fitch noted that consumer spending will grow by 4.8%, up from only 2.2% in 2021 when it started to recover from a small decline in the previous year; however, this growth is expected to slip slightly in 2023 to 4.7%.
“The continued strong growth forecast in 2022 and 2023 is the result of growth in the wider economy, particularly as some domestic restrictions put in place to combat COVID-19 have been lifted,” the report read in part.
“With resistance to the disease among the population, and vaccination continuing, we believe that the likelihood of the reimposition of restrictions is lessening.”
Fitch noted some downside risk to its forecast may emerge should due inflationary pressures.
A higher-than-expected inflation could drag consumer confidence and spending power.