Hippindo Boss Reveals The Cause Of The Republic Of Indonesia's Deflation Of Five Months In A Row

Chairman of Hippindo Budihardjo Iduansjah. (Photo: Theresia Agatha/VOI)

JAKARTA - The Central Statistics Agency (BPS) noted that there was a deflation in September 2024 of 0.12 percent on a monthly basis or month to month (mom).

This figure is higher than in August 2024, which is 0.03 percent.

Acting (Plt) Head of BPS Amalia Adininggar Widyasanti said deflation in September 2024 was deeper than in August 2024.

"There was a decline in the consumer price index from 106.06 in August 2024 to 105.93 in September 2024," he said at a press conference in Jakarta, Tuesday, October 1.

Related to this, the General Chairperson of the Indonesian Shopping Center Retailers and Tenants Association (Hippindo) Budihardjo Iduansjah said that the deflation that occurred for 5 consecutive months was not only caused by the reduced purchasing power of the people, but many people who fled to shop abroad to buy cheap imported goods.

Budihardjo did not deny that the turnover from Food and Beverages (FnB) in September 2024 did decline, which was 3 percent.

While turnover from fashion, such as clothing and footwear fell 5 percent.

"This means that we still cannot predict a drastic decrease in purchasing power. So, if we convey, there may be someone who (transfers) to online. I also ask many fashion friends, they sell them online," said Budihardjo when met by reporters after the 2024 Consumer Sourcing Expo (CSE Asia) press conference at ICE BSD, Tangerang Regency, Wednesday, October 9.

With the shifting of public consumption in the marketplace or e-commerce, Budihardjo is worried that the sale of illegal imports will erode the country's market.

Therefore, according to him, the government must play an active role in maintaining national trade from the invasion of imported goods, especially on online shopping platforms.

"So, now if the online content of a lot of illegal goods is dangerous. So, it must be official goods, that's why we initiated many exhibitions to support those that are official in nature, to be able to sell legally. So that the money circulating must be maintained domestically. For example, with many tourists entering, don't buy Indonesians abroad," he said.

In line with this, Budihardjo revealed that in the past 6 months the retail industry in Malaysia has experienced a significant increase, reaching around 11 percent because many Indonesians have gone shopping to the neighboring country.

"Malaysia is still good (the growth of the retail industry). In those 6 months he increased his retail double digits because many tourists are shopping, many Indonesians shop there. Well, that's what I'm worried about," said Budihardjo.

According to Budihardjo, the deflation that occurred for 5 consecutive months was not due to the declining purchasing power of the people, but rather the circulation of money that had indeed fled abroad or that many Indonesians actually spent spending in Malaysia, Thailand or even Vietnam and China through their cheap imported goods.

"So an Indonesian, that's the case, the money is suspended not in the country. When asked about the purchasing power has decreased? The Indonesian actually has savings. He said, the savings were reduced, but if you look at the savings of people whose Rp5 billion actually increased. Yesterday Malaysian retail the report rose 10-11 percent. It was not a restaurant, but a clothing store like Uniqlo. Indonesians buy Uniqlo there, while fashion stores in Indonesia are down," he said.

He considered that one of the causes of the country's fashion industry to decline and in the end many Indonesians fled to shop abroad because the government in making regulations burdened the domestic industry.

So that the country's industry can progress to compete with neighboring countries, it becomes difficult.

"Because of import permits, import quotas, technical regulations (Pertek), so we went down. We lost to other countries outside the brands. Malaysia took opportunity over policies that protect MSMEs (Indonesia). In fact, in malls, right, there is no need to be protected because people can go abroad. (Meanwhile) MSMEs will not go abroad. That must be protected, cheap goods that are balasan cannot enter," he explained.

"If the brands are good, the expensive bags will not interfere with MSMEs. What I'm worried about will actually make us quiet because people are shopping abroad 'oh here cheap buying shoes and so on'," said Budihardjo.

Budihardjo assessed that the government in making policies or regulations should not hinder the country's industry.

"For example, the arrangement of raw materials for local production must be made easier, so that factories can be produced. Automatically, right, the turnover will increase. Official importers make it easier for them to pay taxes, the trade volume is the trade volume, not the value of the tax being carried out. If the turnover goes up, right, it will definitely pay taxes. So that's what we hope," he concluded.