Recently, many reports have shown that the purchasing power of Indonesian society is experiencing a decline. This is evident from the decrease in domestic consumption across various sectors, from retail to property. However, on the other hand, the number of Indonesians traveling abroad continues to increase.
This phenomenon raises a big question: how is it possible that purchasing power is weakening, yet the number of Indonesian tourists going abroad remains high?
Weakening Purchasing Power: Facts and Causes
Purchasing power is generally measured through the level of consumption and the ability to buy goods or services. The decline in purchasing power in Indonesia can be attributed to several factors:
- Inflation and Rising Prices of Goods
The prices of essential goods continue to rise, making people more selective in spending their money. - Global Economic Pressure
Global economic instability affects the cost of raw materials and the exchange rate of the rupiah, ultimately impacting people’s purchasing power. - Layoffs and Income Uncertainty
Many companies are implementing efficiency measures, including layoffs, causing many people to lose a stable source of income. - Focus on Primary Needs
People prefer to allocate their spending on essential needs rather than a consumerist lifestyle.
Why Do Indonesians Still Travel Abroad?
Amidst weakening purchasing power, the number of Indonesians traveling abroad continues to rise. Several factors that can explain this phenomenon include:
- Economic Class Segmentation
The weakening purchasing power does not apply uniformly to all economic classes. The upper middle class still has sufficient purchasing power to travel abroad. - Promotions and Cheap Tickets
Airlines and travel agencies frequently offer promotional tickets and affordable travel packages, attracting public interest. - Lifestyle Trends and Social Media
Traveling abroad has become part of the lifestyle, especially among the younger generation who want to share their experiences on social media. - Shopping Abroad is Cheaper
Some branded goods or specific products are cheaper when purchased abroad compared to domestically, making people take advantage of this opportunity. - Easier Visa Policies
Several countries offer visa facilitation for Indonesian tourists, making international travel easier to accomplish.
This phenomenon indicates that weakening purchasing power does not necessarily mean that everyone is experiencing financial difficulties. There is a segment of society that still has high purchasing power and takes advantage of various opportunities to travel abroad. On the other hand, this also signifies a shift in consumption patterns, where some people prefer experiences (such as traveling) over purchasing goods.
Going forward, it is important for the government and business actors to understand this shift to adjust business strategies and economic policies more effectively. What do you think? Will this phenomenon continue or is it only temporary?
References:
[2] https://www.reuters.com/markets/asia/indonesias-q4-gdp-5-line-with-poll-forecast-2025-02-05/
[6] https://www.kompas.id/baca/english/2024/05/13/en-ekonomi-ri-dalam-bayang-bayang-pelemahan-daya-beli
