Meanwhile, Indonesian households only manage to save 8.5 percent, on average, of their total income. This is a very low ratio given most analysts advise that at least 20 percent of income should go towards savings. Those low-income Indonesian households only manage to save 5.2 percent of their total monthly income, while the high-income households save 12.6 percent on average.

For the low-income families it is difficult to save as they barely have enough income to cover their basic needs such as food and transportation costs. Moreover, Indonesia's economic slowdown in the years 2011-2015 (in combination with high inflation due to subsidized fuel price reforms in 2013-2015) has been an additional problem, limiting people's purchasing power.

Indonesia is also characterized by the low financial literacy of its population. Therefore, despite having a population that numbers over 255 million people, the number of saving accounts are actually relatively few. Based on data from the World Bank, only 36.1 percent of Indonesia’s adult population owned a bank account in 2014.

OJK Chairman Muliaman Hadad commented that these low ratios imply that it becomes more difficult for Indonesia to finance the nation's economic development. As such, a large part of financial means need to come from abroad. Problematically, third-party fund growth in Indonesia has been bleak over the past few years. In 2015, third-party funds only grew by 7.3 percent (y/y) to IDR 4.413.1 trillion (approx. USD $339 billion), whereas growth was recorded at a pace of 12.3 percent (y/y) in the preceding year.

Indonesian President Joko Widodo recently stated that he hopes Indonesian people will become more successful in terms of saving their income. This would contribute to overall economic development of Southeast Asia's largest economy. For example, Indonesia needs IDR 5,519.4 trillion for infrastructure development in the years 2015-2019.

Third-Party Funds at Indonesian Banks:

Year       Funds
(in IDR billion)
2016¹    4,495,000
2015    4,413,056
2014    4,114,420
2013    3,663,968
2012    3,225,198

¹ per September 2016
Source: Kontan

Gross National Savings per GDP:

Country Percentage
China    48.87%
Singapore    46.73%
South Korea    35.11%
Indonesia    30.87%
Malaysia    29.83%

Source: Kontan