EXPERT ADVISES PRUDENCE
While consumption helps to spur the economy, Bhima cautioned against excessive spending, particularly when purchases are financed through debt.
He highlighted the rapid growth of Buy Now Pay Later (BNPL) services. As of April 2026, banking-sector Buy Now Pay Later (BNPL) lending grew 37.29 per cent year-on-year to 29.3 trillion rupiah, with the number of accounts reaching 31.76 million, according to a Financial Services Authority (OJK) statement on Jun 5.
According to Bhima, the trend reflects unhealthy financial behaviour that could create problems in the future. He urged consumers to reduce impulse spending and avoid being tempted by lending promotions.
The phenomenon, he added, is likely to fade once economic conditions improve and people regain confidence in pursuing long-term financial goals.
“When the economy starts improving again, people will return to focusing on buying homes. They will return to focusing on purchasing vehicles,” Bhima said.
Data from Bank Indonesia’s latest residential property price survey showed primary residential property sales fell 25.67 per cent year-on-year in the first quarter of 2026, reversing growth of 7.83 per cent in the previous quarter.
Residential property prices in the same period grew 0.62 per cent year-on-year, suggesting subdued demand.
The Association of Indonesian Automotive Industries (Gaikindo) has said auto industry players are currently under pressure from declining purchasing power. Gaikindo secretary-general Kukuh Kumara said in January that car prices have increased by 7.5 per cent annually but “potential buyers'” incomes have grown by only 3 per cent.
Wholesale car sales of 803,687 units in 2025 were a decrease of 7.2 per cent from 2024’s 865,723 units, according to Gaikindo data.
Retail car sales (from dealers to consumers) of 833,692 units were a 6.3 per cent decrease from 2024. GAIKINDO remains optimistic about the prospects for a recovery this year.
Bhima cautioned policymakers not to assume crowded shopping centres or strong consumer spending means the economy is in good shape.
“We should not interpret crowds as proof that the economy is doing fine. We need to examine more critically what lies behind this spending behaviour,” he said.
Additional reporting by Kiki Siregar
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