The emergence of a money flow in the context of the government's Family Hope Program (in Indonesian: Program Keluarga Harapan, or PKH), a cash transfer program for the nation's poorest households, is hoped to boost household consumption in Indonesia in 2018. In February 2018 the first phase of this year's PKH program will be conducted.
Bhima Yudhistira, economist at the Institute for Development of Economics and Finance (Indef), said there should emerge a flow of money once the central government disburses the cash in the first round of this year's Family Hope Program. The government is estimated to transfer IDR 500,000 (approx. USD $38) to 10 million eligibles, hence it would inject about IDR 5 trillion (approx. USD $376 million) into society next month.
Moreover, the February-March period is the big harvest season in Indonesia, hence those working in the country's agriculture sector can expect to see more income. About 50 percent of the poorer segments of Indonesia's population is engaged in the agriculture sector.
"Thus the combination of the Family Hope Program and the big harvest season should boost the purchasing power of the poorer segments in Indonesian society in the first quarter of 2018," Yudhistira said. As a result, Indonesia's household consumption should be able to grow above 5.1 percent year-on-year (y/y) in the first quarter of 2018.
Yudhistira also advises the government not to raise subsidized fuel and electricity prices until the purchasing power of the poorer segments of society have strengthened.
Through the Family Hope Program the 10 million poorest people in Indonesia obtain IDR 1.89 million (approx. USD $142) per year through multiple disbursements.