Weakened Purchasing Power: How to Navigate Economic Uncertainty

1 week ago 5

March 26, 2025 | 05:00 pm

TEMPO.CO, Jakarta - Economic uncertainty, marked by potential extreme inflation amidst prolonged deflation, has prompted people to be more cautious in managing their finances. Other signs also appear from the weakened purchasing power with several indicators, especially after Indonesia started the year with month-to-month deflation in the first two months of 2025.

Several anticipatory steps are necessary to maintain household economic stability in challenging conditions.

Baratadewa Sakti Perdana, a family financial practitioner and business financial companion for SMEs, emphasizes the importance of wise financial management strategies as the initial steps in facing economic dynamics.

"People must prioritize budgets for basic needs such as food, energy, and health. Non-essential expenses should be reduced to maintain a balanced budget," he said as quoted by Antara.

Food Resilience and Efficient Shopping

One of the steps that can be taken is to increase food resilience independently. People are encouraged to grow vegetables in their yards or apply hydroponic methods that do not require large land areas.

In addition, buying food directly from SMEs that work with farmers can be an alternative to obtain more affordable prices. This step is also believed to break the long distribution chain and reduce the risk of price spikes due to brokers.

Income Diversification and Transportation Efficiency

Diversifying sources of income is also key in facing economic uncertainty. Relying on a single source of income is considered too risky in such situations.

"Side businesses, such as online businesses or skills-based services, can be a useful supplemental income," he explained.

On the other hand, transportation costs must be considered. People are encouraged to switch to public transportation or app-based services to reduce fuel costs. For short trips, walking or cycling can be more economical and healthier alternatives.

Safe Investments and Social Solidarity

In an uncertain economic situation, investing in more stable assets such as gold or strong foreign currencies may be used to help protect against inflation.

"Gold tends to be stable and is often seen as a hedge against inflation. Deposits in stronger foreign currencies can also be an option to maintain purchasing power," he said, a graduate of Jenderal Soedirman University.

Strengthening community networks is also seen as important in difficult economic times. People can form communities to share resources or use a barter system to reduce dependence on cash.

"Maintaining social solidarity and strengthening community networks is another way to face economic uncertainty," Baratadewa explained.

Anticipating Increased Crime

According to Antara, economic uncertainty also potentially increases crime rates. Therefore, people must increase vigilance by strengthening environmental security systems, such as night patrols, installing CCTV, and adequate lighting.

These strategies are expected to help people face the possibility of extreme inflation and maintain household financial stability. Adapting a more disciplined lifestyle and financial management is key to survival, including amidst weakened purchasing power.

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