Jakarta. Indonesian households are becoming increasingly defensive with their spending as consumer confidence loses the gains made earlier this year, signaling that the country’s resilient economic growth is not being felt evenly across society, economists said Monday.

The Consumer Confidence Index (CCI) fell to 116.8 in July 2026, down from 127 at the start of the year, according to data cited during a Permata Institute for Economic Research (PIER) during a virtual conference in Jakarta. The decline reflects growing concerns over household income, employment prospects and purchasing power.

Adjie Harisandi, an economist at Permata Bank, said the weakening confidence was likely to make consumers more cautious, particularly when buying big-ticket items.

“People will tend to become increasingly defensive in how they spend,” Adjie said. “They will tend to postpone purchases of durable goods,” he added.

The trend comes even as Indonesia’s economy continues to show resilience. The economy grew 5.29% year-on-year in the second quarter, bringing first-half growth to 5.45%. International institutions such as the IMF, the World Bank, ADB and OECD also continue to project Indonesia’s 2026 growth at between 4.7% and 5.2%.

“The numbers are okay on the surface, but we also have to look at the quality of our economic growth,” Josua Pardede, chief economist at Permata Bank, said. “We have to ask whether it has reached all segments of society and whether it has increased people’s incomes evenly,” he added.

The weakening consumer confidence has also been reflected in household spending patterns. PIER data showed that spending on durable goods accounted for 7.9% of non-food expenditure in 2025, down from 9.9% in 2019, as households prioritized fixed and obligatory expenses.

Adjie said consumer confidence had briefly improved around March and April, supported partly by higher transfers and holiday allowances during the Ramadan and Eid period. But sentiment subsequently weakened again as households faced higher input and commodity prices.

The result is a more defensive consumer, with households increasingly delaying purchases that can be postponed. The caution is not limited to consumers. Josua pointed to weakening domestic investment as another sign that economic resilience may not be translating into stronger business confidence.

Domestic investment contracted in the second quarter, he said, indicating that businesses were becoming more cautious about committing capital.

“This means there are concerns among domestic businesses,” Josua said. “They are holding back their investment plans.” He said the government should be open to adjusting policies if doing so could restore confidence among businesses and investors.

“Policy correction is possible and very reasonable,” Josua said. “If it can boost confidence among businesses and investors, why not?”

The challenge for policymakers, he said, is to turn economic growth into stronger investment, job creation and household incomes.

Higher investment would ultimately help improve employment and incomes, allowing economic growth to become more broadly felt, Josua said.

Add as a preferred source on Google +