Bank Indonesia (BI) announced an increase in the consumer confidence index (IKK) from 121.2 in October to 124.0 in November 2025. The business world needs to take advantage of this optimism so that the positive momentum is maintained and becomes a structural foundation for strengthening public consumption as a driver of growth for the next quarter.
In the November 2025 Consumer Survey published by BI on Tuesday (09/12/2025), the increase in IKK indicates a recovery in consumer perception of economic conditions. According to BI, the increase in consumer confidence stems from current and future economic conditions, which are optimistic and improving compared to the previous period.
The highest IKK was recorded among respondents with expenditures >Rp5 million (130.6), followed by respondents with expenditures of Rp4.1-5 million (126.9). Based on age group, the highest optimism was experienced by respondents aged 20-30 years at 128.6. IKK increased in the majority of cities surveyed, especially in Manado, Mataram, and Medan," said Executive Director of the BI Communication Department Ramdan Denny Prakoso.
The improvement in consumer perception of the current economic conditions is also reflected in the increase in the Economic Conditions Index (IKE), which is derived from an increase in all of its components, namely the Current Income Index (IPSI), which was recorded at 121.5, the Durable Goods Purchase Index (IPBDG) at 109.4, and the Job Availability Index (IKLK) at 103.7. The optimism of young people aged 20-30 is again reflected in these three indices.
With this improvement in perception, BI also noted that the proportion of consumer income for consumption remained at 74.6%, while the proportion of installment payments and the proportion of consumer income saved remained relatively stable at 11.0% and 14.4%, respectively. This was driven by an increase in respondents' perceptions of their income expectations for the next six months, job availability, and future business developments.
Keep up the positive momentum
The business world welcomes the increase in the IKK as a positive sentiment and signal towards the end of the year. Chairperson of the Indonesian Employers Association (Apindo) Shinta W. Kamdani stated that improved sentiment at the end of the year is very important because household consumption will be the engine of seasonal growth, which in turn will drive retail transactions and demand for goods and services.
However, Shinta emphasized that the nature of the increase in the IKK needs to be examined more closely to determine whether it is sentimental or reflects an overall recovery in purchasing power. Currently, with the real sector still facing pressures such as uneven manufacturing recovery and rising commodity prices, it may still hold back public spending. Actual consumption indicators will confirm this increase in the near future.
"The upward trend in the IKK could drive continued growth into the first quarter of 2026, which is projected to strengthen due to the consolidation of factors such as New Year, Chinese New Year, Ramadan, and Eid al-Fitr, before moderating in the second and third quarters when seasonal effects begin to subside, especially if there is no further supportive policy intervention from the government," said Shinta when contacted on Tuesday (12/09/2025).
By ensuring that the positive momentum at the end of 2025 is not lost, Shinta emphasized that the business world still needs consistent stimulus for purchasing power, accelerated government spending, food price stability, and improvements in the business climate, which remain key to restoring solid public consumption and production activity in early 2026.
Sharing Shinta's view, Chairman of the Indonesian Chamber of Commerce and Industry Anindya Bakrie stated that, like consumer optimism, the current mood among entrepreneurs is relatively positive. As the largest providers of employment, entrepreneurs are considering new investment opportunities for expansion in 2026. Therefore, the business climate must be maintained.
"The collaboration promoted by the government through the Indonesia Incorporated concept has given new confidence to large businesses. For small businesses, government social programs such as Free Nutritious Meals, for example, can help maintain optimism, especially in the face of economic pressures in the regions," said Anindya in Jakarta.
Anticipation is still necessary
Although the IKK reflects consumers' improved expectations regarding economic conditions, caution is still needed due to two main factors. First, the recovery in expectations is not synonymous with a recovery in purchasing power and household consumption. Second, seasonal factors are likely to disappear after some time.
Executive Director of the Center of Reform on Economics (CORE) Indonesia Mohammad Faisal assessed that the increase in the IKK in November was linear with the upward trend in the PMI index, which was driven by domestic demand rather than exports. With this increase, it is only natural that the IKK rose, given that the retail sales index also experienced a significant increase.
"We just need to see again where this increase in household consumption is coming from, whether it is from the middle class, which has been experiencing a decline in purchasing power, or elsewhere. To be able to say whether this increase will continue or not, we may have to wait and see after the new year," Faisal explained to SUARon Tuesday (12/09/2025).
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The increase in the IKK towards the end of the year is relatively normal due to the Christmas and New Year boost. The main determining factor to look at going forward, Faisal emphasized, is the increase in income, which will also determine the level of people's purchasing power. Drivers such as the stimulus that has been disbursed in three stages can help demand, but it takes time and the impact may not necessarily be sustained in the long term.
"If the stimulus is effective, it can boost demand for a longer period of time, not just temporarily. That is the hope, especially since, at the same time, in addition to fiscal stimulus, there is also monetary stimulus with several interest rate cuts. Hopefully, this combination of stimuli can boost demand," he said.
Reiterating Faisal's explanation, Deni Friawan, Head of the Economics Department at the Center for Strategic and International Studies (CSIS), emphasized the difference between IKK and purchasing power. The existence of more optimistic expectations can be interpreted to a limited extent, but this does not necessarily prove an improvement in the overall economic condition of the community.
"What is clear, for example, is that because he is more optimistic, we can expect that consumers at the end of the year will be more willing to consume and spend. That is the only implication. In terms of purchasing power, we have to see whether income will improve or not," said Deni.
According to Deni, improved expectations do not necessarily imply an improvement in the economy in the first quarter of 2026. Indications that people are more willing to consume are still too early to see the impact of improved consumption next year, mainly due to rapid policy changes, global economic uncertainty, and the government's swift response to momentum.
"Approaching 2026, there have been no significant changes in policy or new breakthroughs other than stimulus measures. Given this situation, it is too early to expect that the improvement in consumer sentiment or confidence at the end of this year will continue into 2026," Deni concluded.
