Consumer confidence slips on higher cooking oil prices

The Jakarta Post ,  Jakarta   |  Wed, 07/04/2007 10:46 AM  |  Business

The Jakarta Post, Jakarta

New cars and TVs look to be off the shopping list for some time for most people after consumer confidence slipped slightly on concerns over price increases, particularly the price of cooking oil, the latest survey from the Danareksa Research Institute shows.

Only 25.8 percent of consumers surveyed in June plan to buy durable goods over the next six months -- down from 27.2 percent in the previous month -- as people gave more priority to buying basic foodstuffs after the prices of several of these rose significantly recently.

The soaring price of cooking oil, in particular, dampened consumer confidence last month, the Danareksa survey revealed. This was compounded by kerosene shortages in several areas.

As a result, the survey's Present Situations Index -- which reflects consumer buying intentions at the moment -- slipped to 59.3 in June from 60.2 the previous month.

However, consumers remained cautiously optimistic about the outlook over the next six months, with the Expectations Index rising slightly to 98.3 from 97.8.

Overall, the Consumer Confidence Index dropped 0.2 percent to 81.6, still well below the neutral 100 level.

The Central Statistics Agency (BPS) reported that monthly inflation clocked in at 0.23 percent in June, compared with 0.1 percent in May.

On-year inflation, however, continued to ease to 5.77 percent from 6.01 percent previously.

The Danareksa survey revealed that consumers were dissatisfied with the government's ability to stabilize prices and create jobs, which affects the prospects of higher income ahead.

Against this backdrop, the Consumer Confidence in the Government Index fell for the eighth straight month to 94.7.

The level of consumer confidence could rapidly change, however, depending on how quickly the government can get basic foodstuff prices -- particularly cooking oil prices -- under control, and get the wheels of the real economy turning.

The Danareksa survey is conducted monthly and covers at least 1,700 households across six different major regions of Indonesia.

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