Indonesia to Track Millennial Spending in Inflation Index Recast
(Bloomberg) -- With the millennials making up almost a third of Indonesia’s population, the nation’s statistics agency will soon revamp its inflation index to capture their spending habit.
A team of professionals are already scouring Instagram and Facebook and online marketplaces to study the youth’s spending trend, according to Suhariyanto, the head of Indonesia’s statistics bureau. A new consumer price index after a revision of the existing components and a new base year will be announced latest by January 2020, he told a news conference in Jakarta on Friday.
- With the Internet economy in the world’s fourth-most populous country forecast to swell to $100 billion by 2025, policy makers are struggling to keep pace with the switch in consumer spending habits. The statistics bureau still relies on field surveys for its inflation estimate that the government agencies and the central bank use for policy formulation.
- Indonesia, an archipelago of more than 17,000 islands, has been using 2012 prices as inflation benchmark from 2014 and the revamped index may see inclusion and exclusion of certain commodities. While the nation’s central bank has embraced big data to assist in its policy making, the stock exchange has been wooing the millennials to widen its investor base.
- The statistic bureau has completed a survey on new weightings in its consumer price index and will coordinate with Bank Indonesia, the finance ministry and other stakeholders before adopting the new series, Suhariyanto said.
- The bureau will still use the traditional method of going to the field to gather data and combine it with the data mined from internet to arrive at more realistic findings, Suhariyanto said.
- “The more prosperous the community is, the lesser the percentage is for food-related spending. They will switch to non-food spending,” Suhariyanto said. “We really want to capture the latest trend in consumption. It may be that people’s spending for phone credit has increased significantly compared to 2012.”
- Click to read how Bank Indonesia is embracing big data
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