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Consumers less upbeat on economy
Consumers are less optimistic about Indonesia’s economy as the government plans to raise the prices for electricity and the use of toll roads, a central bank survey reveals
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onsumers are less optimistic about Indonesia’s economy as the government plans to raise the prices for electricity and the use of toll roads, a central bank survey reveals.
The government finally raised toll road rates by an average of 15 percent on Sept. 28 after weeks of delay caused by concern over the possible negative impact on home bound travelers during the Idul Fitri holidays on Sept 21-22.
State power firm PT Perusahaan Listrik Negara (PLN) has proposed to the government to increase electricity rates by an average 20 percent. A final decision on this also requires the consent of lawmakers.
In September, the survey showed that although the Consumer Confidence Index remained at an overall optimistic level, it had dropped 3.5 points from a month earlier to 110.8.
The survey covered 4,600 households in 18 cities, with a sampling error of 2 percent. An index of above 100 shows optimism and below 100 shows pessimism.
BI said the Consumer Confidence Index declined somewhat as respondents interviewed also showed less optimism on the economy, as showed by the Current Economic Condition Index (IKE), which dropped 3.9 points to 96.6, due to less favorable trends on jobs.
Respondents expressed less optimism on the economy in the next six months, as indicated by the 3.1-point decline in the Consumer Expectation Index (IEK) to 125.1.
These declines in the Consumer Confidence Index and the Current Economic Condition Index have affected people’s purchasing power as showed by the index on timely purchases of durable goods, which fell 6.3 points.
Prices are expected to moderately increase in the next three months as respondents believe the Christmas holidays will drive prices up based on the assumption that holidays always increase inflation. Respondents thought that food will be the main contributor to the increasing prices.
However they also thought that their own income would remain stable in the next six months, and this response was also confirmed by the data from the Bank Indonesia.
Women tend to be more optimistic that they will have a better income, the survey showed. Women scored 139.4 on the income expectation index, higher than the 137.9 scored by men. Respondents with postgraduate degrees were more optimistic concerning their income expectations in the next six months, scoring 148.6 points.
The survey also showed interest rates would continue to decline in the next six months. The deposit rate expectation index showed a 2.5-point decline to 115.2, while the saving index also showed a 2.6-point decline to 125.0.
