Bank Mandiri Economist Says Community Expenditure Level With Savings Balance Below IDR 1 Million Increases 66.2 Percent

Illustration. (Photo: Doc. Antara)

JAKARTA - Head of Mandiri Institute Teguh Yudo Wicaksono explained the trend of spending based on community groups. Yudo revealed that his party divided the community into three groups, namely lower class people with savings balances below Rp. 1 million, middle class with savings balances of Rp. 1 to Rp. million and high-end people with savings balances above Rp. 10 million.

"What's interesting is that lower community group spending is still very high. Expenditures grew 66.2 percent," said Yudo, quoted on Wednesday, August 23.

Meanwhile, middle class spending grew 35.96 percent and groups grew 18 percent.

"So if we look at it, it is quite strong in the lower group spending," added Yudo.

He continued, based on Mandiri Lending Index data, the growth in lower group community spending continued to increase and the acceleration was relatively higher than the middle and upper class group, which after Eid al-Fitr and school holidays experienced normalization.

"The growth in spending from these 3 groups in July index for lower spending is at the level of 193.8 while last year it was 116.6, meaning that lower public spending grew 66.2 percent," he said.

As for the middle class, 35.96 percent grew, while the upper group grew by 18 percent.

"Although the lower group acceleration is quite strong, in size, the middle and upper class whose contributions are quite large with a total of 86 of the total expenditures in our data," explained Yudo.

Furthermore, Yudo also explained that there is a correlation between spending on community groups and their savings. He said that the lower class of people continued to shop after Lebaran which had implications for decreasing third party funds (DPK) and reached the lowest level since January 2022, namely level 83.

On the other hand, the middle class community is also still shopping after Eid but is relatively limited compared to the lower group and is slowing down at this time.

"The DPK rate decreased slightly during that period, but it is still relatively the same as the January 2022 level at the 98.8 level," Yudo continued.

And the spending pattern in the upper group is similar to the middle but more limited group. Consequently, the level of DPK, which had dropped since October 2022, has increased again since January 2023 and is currently approaching the level of January 2022 at the level of 97.3.

"MSI in general since 2022 when consumption begins to enter a stable and sustainable phase, MSI is relatively in line with household consumption," concluded Yudo.