Income and Expenditure: Indonesia

October 2020

Indonesian consumer income is expected to grow nearly six times by 2040, driven by robust population growth, rising worker productivity, and increasing wages. Purchasing power will be concentrated in the hands of the Middle Youth, determining future discretionary spending. Non-durable goods are to remain the main spending category, with population growth expected to be the main driver of household expenditure in major cities. Wealth is forecast to remain concentrated in the real estate sector.

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Overview:

The Country Briefings series examine market potential, economic and consumer trends impacting each country and how they are set to change.

Each Country Briefing covers one of these topics:

Economy, Finance and Trade: Understanding the structure, health and potential risks of an economy are important for decision-making within an existing operating environment as well as for expansion strategies. Real GDP growth, inflation and exchange rate fluctuations will directly impact consumer market potential. Import and export trade profiles help gauge how open an economy is to trade and investment, while analysis of government finances can be used to explore macroeconomic stability and susceptibility to economic shocks.

Income and Expenditure: Insights into income, wealth and expenditure of consumers are vital in helping businesses make strategic decisions with regards to which country (or even which region within a country) to enter, which consumer segment to target, which products or services to market, and at which price point. Other factors such as the size and expansion of the middle class and income inequality are also important in helping companies gauge the potential of a country market.

Households: Global shifts in gender, ageing, migration and housing are transforming the size, location,  general make-up as well as income and expenditure of households around the globe, with diverse implications for governments and companies. Households insights can help identify the decision-making processes and consumption tastes of different household groups and types within a country, and assess household appliance and digital readiness that is key for formulating market technology and internet strategies.

Business Dynamics: A stable and competitive business environment is vital to operate efficiently and attract inward investment. Businesses can assess these factors alongside challenges such as corruption, political instability and terrorism, also gain insight into business operating environment and make strategic investment decisions. Transport infrastructure, ICT readiness and labour force dynamics will also identify potential issues with a supply chain and the level of workforce skills.

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The briefings cover 103 countries and identify topics of crucial interest to planners, marketers and researchers.

Income and Expenditure: Indonesia

HEADLINES

PROSPECTS

Middle Youth to remain the predominant cohort, determining future spending
Low-income social classes to remain predominant, yet the middle class to record robust expansion
Jawa Barat region to remain the largest consumer market, food remains the largest expenditure category
The rich are becoming richer, with wealth concentrated in real estate
Chart 1 Annual Gross Income Distribution by Age in Indonesia: 2019 Chart 2 Distribution of Income in Indonesia: Key Metrics 2019-2040 Chart 3 Gross Income Growth Index in Indonesia 2019-2040 Chart 4 Average Gross Income by Age in Indonesia : 2019-2040 Chart 5 Total Population and Population Aged 50+ by Income Brackets in 2040 Chart 6 Gini Index 2019/2040 Chart 7 Households by Disposable Income (PPP) over 2019-2040 Chart 8 Overview of Indonesia’s Social Classes Chart 9 Social Class D by Age: 2019/2040 Chart 10 Consumer Market and Spending in Indonesia: Key Metrics 2040 Chart 11 Consumer Expenditure by Region: Size in 2040 and Growth over 2014-2040 Chart 12 Urban/Rural Consumer Expenditure in 2040 Chart 13 Households Expenditure in 2019 Chart 14 Consumer Spending by Category in Indonesia 2019-2040: USD per Household Chart 15 Index of Consumer Prices in Indonesia over 2010-2019 Chart 16 Households Expenditure by Category in Indonesia: 2040 Chart 17 Indonesia’s Wealth Landscape: 2019-2030
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