Annual expenditure on cigarettes and tobacco in Indonesia 2010-2019

In 2019, the total expenditure on cigarettes and tobacco in Indonesia was about 41 billion U.S. dollars. This was expected to increase to 42 billion U.S. dollars in 2022. The economic impact of the coronavirus (COVID-19) pandemic was predicted to lead to a decrease in spending on cigarettes and tobacco in 2020. However, this was expected to rebound by 2022.

Changes to consumer spend on tobacco during the pandemic

The coronavirus (COVID-19) pandemic had led to significant changes in consumer spending. The closures of borders and businesses meant that many households saw a reduction in their disposable income. Indonesian consumers were thus expected to reduce their share of consumption expenditure on tobacco and cigarettes in 2020. This decrease in spending could also be due to the increase in cigarette and tobacco tax imposed by the Indonesian government earlier that year.

Cigarette affordability and a nation of smokers

In January 2020, the Indonesian government increased the excise duties for cigarettes. Even so, cigarettes in Indonesia remain affordable, with the average retail price for one pack of clove cigarettes at less than 1.20 U.S. dollars. The affordability of cigarettes was one of the leading factors as to why smoking is so prevalent there. The population of Indonesian smokers was forecasted to increase in the next few years. Unsurprisingly, Indonesia was one of the leading markets by revenue worldwide for tobacco products.