DIGIVESTASI - Indonesia loses economic potential of up to IDR 324 trillion due to spending by 10 million wealthy individuals who choose to shop abroad.

Coordinating Minister for Economic Affairs, Airlangga Hartarto, explained that around 10 million Indonesians travel abroad, potentially spending money there.

"We calculate with the most conservative shopping assumption of 2,000 USD per person, which is equivalent to about IDR 324 trillion," said Airlangga on Friday (January 17, 2024).

Airlangga also acknowledged that some goods abroad are cheaper compared to Indonesia, which becomes an attraction for high-income groups to shop overseas.

This happens because imported goods in Indonesia are subject to various taxes, including import duties, income tax (PPh), and value-added tax (VAT), making prices higher than in countries like Singapore, which does not impose similar tax levies.

Hindering Economic Growth

Airlangga added that the consumption behavior of the 10 million wealthy people who shop abroad acts as a barrier to Indonesia's economic growth. This large purchasing power is not fully utilized domestically.

"Our main issue is around 10 million wealthy people whose spending is not happening in Indonesia. Meanwhile, their purchasing power is so significant, which is why our economic growth is not optimal," he explained on Wednesday (January 15, 2025).

Nevertheless, Indonesia recorded an economic growth of 4.95 percent in Q3-2024, higher compared to countries such as Thailand and South Korea.

Real sector indicators also show positive results, with the Manufacturing PMI at an expansive level of 51.2, driven by domestic demand, consumer optimism, and growth in the Real Sales Index.

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