Senior economist Raden Pardede said the decline in the Jakarta Composite Index (IHSG) could spill over into household purchasing power. He made the remarks on the CNBC Indonesia program Cuap Cuap Cuan on Tuesday, 10 November 2026.
Pardede, who is also founder of CReco Research Institute, said the index had once reached 9,000 points. It now stands at 4,900 or 5,000, he said, a fall of more than 40 percent.
Wealth effect on spending
BCA economist Lazuardin Thariq Hamzah projected that the IHSG fall, linked to an MSCI announcement, would also weigh on household consumption and spending. His research note, Shocks on Market and the Real Sector, was cited on Tuesday, 20 October 2026. It referred to a market decline on 16 October 2026.
Pardede said the drop reduces investors’ wealth, which could lead them to hold back spending or cut living costs. Lazuardin’s note argues that the market decline may cause negative wealth effects and weaker confidence. Households, it adds, may later return to stocks once valuations look cheap during recovery.
Retail investors bear losses
The number of capital market investors reached 20.04 million single investor identifications (SID) in December 2025. That was up 34.8 percent from 14.87 million at the close of 2024.
Lazuardin said the growing and more actively trading retail base makes it quite possible that most of the losses from the 11.2 percent IHSG decline fall on households. He linked that decline to the 16 October 2026 market drop.
Bank Indonesia survey data for September 2026 showed 4.1 percent of respondents choosing stocks or mutual funds as their main investment instrument. An initial reading for the same month was 2.7 percent.
Source: Bank Indonesia · CReco Research Institute
