Indonesia Consumer Confidence Index October 2007

31 10 2007

Confidence Deteriorates As Low-Income Households Suffer

The Consumer Confidence Index (CCI), which had dipped by 2.1% in August, retreated further in September, losing 1.9% to a level of 83.0.

Unlike in August when the decline in the CCI owed much to apprehension over the short-term outlook, September’s decline was mostly driven by less favorable assessments of present-day conditions (the Present Situations Index (PSI) fell by 2.4% to 63.8). This is of some concern since further declines in this index in the months ahead may reflect softening growth in the economy.

Rising prices of basic foodstuffs continue to dampen consumers’ assessments of current economic conditions. Moreover, consumers are also having to grapple with other problems such as higher education costs in the new academic year, kerosene fuel scarcity and stubbornly high cooking oil prices. These factors are behind the 2.4% decline in the PSI. Meanwhile, looking ahead, consumers are also less upbeat: the Expectations Index (EI) sagged by 1.6% from 98.9 in August to 97.4 in September.

Buying intentions deteriorated slightly in September. According to the survey, the percentage of respondents planning to buy durable goods fell from a high of 28.9% in August to 26.2% in September. Rising foodstuff prices, weaker income gains, and growing concerns over the health of the economy were all contributing factors.

Yet despite consumer concerns over rising prices and unemployment, confidence in the government held up. In the latest survey, the Consumer Confidence in the Government Index (CCGI) rose 2.2% to 100.2. Nonetheless, it is still worth noting that consumers were more dissatisfied with the government’s ability to stabilize the price of goods (this component of the CCGI fell 2.5% to just 78.7 in September).




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