Lowest Consumer Confidence Index Since 2022, Airlangga Reveals The Cause

Coordinating Minister for Economic Affairs Airlangga Hartarto opened his voice regarding the decline in the Consumer Confidence Index (IKK) which reached its lowest point since 2022.

For information, Bank Indonesia (BI) announced the results of the Consumer Confidence Survey (SKK) for May 2025, which shows that the Consumer Confidence Index (IKK) is at the level of 117.5, this figure is lower than the April 2025 IKK which was recorded at 121.7.

In addition, IKK May 2025 at the level of 117.5 is the lowest since September 2022, or in almost the last three years which at that time was recorded at 117.2.

He said the weakening condition of people's purchasing power was due to the global economic uncertainty situation which also affected the domestic economy.

"Yes, of course, all of this is related to the global situation, of course it will also have a very important effect on the domestic economy," said Airlangga to the media crew, Friday, June 13.

Airlangga conveyed that as an anticipatory measure, the government together with business actors such as the Indonesian Shopping Center Retailers and Tenants Association (Hippindo) and the Indonesian Retail Entrepreneurs Association (Aprindo) launched a discount program during the school holidays in June 'July 2025.

According to him, this program is expected to encourage people's purchasing power to reach IDR 60 trillion in the next two months.

"We are targeting this discount to attract this expenditure in two months of Rp. 60 trillion," he explained.

In addition, he conveyed that the government also distributed various forms of social assistance, including the Family Hope Program (PKH) and wage subsidies, in order to maintain people's purchasing power by the end of the year.

Airlangga explained that after the close momentum of Eid and Christmas last year, more stimulus was needed to maintain consumption activities ahead of Christmas and later this year.

"Indeed, we see that we don't have an event until December for Christmas. Because last Christmas and Eid was getting tighter," he added.

For information, the Bank Indonesia Consumer Survey in May 2025 indicated that consumer confidence in economic conditions was maintained, this was reflected in the May 2025 Consumer Confidence Index (IKK) of 117.5, although lower than the IKK in the previous month which was recorded at 121.7.

Executive Director of the Communication Department, Ramdan Denny Prakoso, conveyed that consumer optimism in May 2025 came from consumer confidence in current economic conditions and consumer confidence in future economic conditions that are maintained.

"This is reflected in the Current Economic Condition Index (IKE) and the Consumer Expectation Index (IEK), which were recorded at 106.0 and 129.0, respectively," he wrote in his statement, Thursday, June 12.

Based on the expenditure group, consumer confidence in May 2025 remained optimistic for all groups, with the highest IKK recorded in respondents spending more than IDR 5 million (120.5) followed by IDR 4.1 million to IDR 5 million (117.7).

However, the development of optimism has decreased compared to the previous month's conditions for all expenditure groups.

Based on age group, IKK also remains at an optimistic level in all age groups, with the highest IKK recorded at respondents aged 20-30 years (124.8), 31-40 years (117.7), and 41-50 years (116.7).

The age group >60 years experienced a slight increase in optimism compared to the previous period, while other age groups decreased.

Spatially, an increase in IKK occurred in several cities, with the highest increase in Semarang, followed by Manado and Mataram.

Meanwhile, a number of cities have decreased by IKK, especially in Medan, Banten, and Surabaya.

As for May 2025, the average proportion of consumer income for consumption (average property to consumer ratio) was recorded at 74.3 percent, lower than the proportion in the previous month, which was 74.8 percent.

Meanwhile, the proportion of installment/debt payment to income ratio increased slightly to 10.8 percent in May 2025 from 10.5 percent in April 2025, while the proportion of consumer income saved to income ratio was relatively stable at 14.9 percent.

The proportion of consumption of income is indicated to fall in all expenditure groups, except for the expenditure group of more than IDR 5 million (71.3 percent).

Meanwhile, the portion of income saved increased for the expenditure group of IDR 1 million to IDR 2 million (14.9 percent) and IDR 4.1 million to IDR 5 million (15.3 percent), amid a decline in other spending groups.