Confidence research shows ambiguity of RI consumers

Indonesian consumers show their ambiguity by spending more cautiously despite standing high in a recent consumers global confidence index survey.

Indonesia stands at 115 of the consumers confidence index. Meanwhile, the global index slumps to 90.

According to the latest Nielsen Global Consumer Confidence Survey, Indonesia’s optimism was still stable in September even though it declined to one place from 116 in the first quarter this year.

“We are still optimistic because our rank is still above 100,” managing director of the Nielsen Company Indonesia Catherine Eddy said Thursday. She added that Indonesia was in the top three rank for consumer’s confidence on economy after India (129) and Thailand (117).

The survey was conducted from Sept. 3 to 21, surveying more than 26,000 consumers online in 53 countries across the world wexcept Africa.

Despite the soaring confidence, however, the report indicated that Indonesians were more cautious in their spending behavior. The report said 72 percent of Indonesians were planning to save their money compared to 63 percent in Asia Pacific.

The survey also reported that Indonesians were changing the way they spend their money with 79 percent planning to save more for household expenses compared to 61 percent in Asia Pacific.

Catherine said consumers had exercised some degree of caution despite high confidence on the financial situations, leading them to take actions such as slashing household expenses. The report said Indonesians were particularly spending less on new clothes, cutting down on entertainment expenses, delaying technology product purchases and saving more on electricity and gasoline.

The research also said that as many as 22 percent of Indonesians would cut their telephone expenses and said that they would continue to cut down on this even after the economy recovered.

Catherine said the lack of global confidence had somehow affected Indonesians’ spending behavior, adding consumers were more cautious on chances that Indonesia might be affected by the recession. The survey also included consumers’ perceptions on job opportunities in which Indonesians confidence over job opportunities had dropped from 70 percent at the beginning of the year to 61 percent in September.

Commenting on the survey, Danareksa Research Institute chief researcher Purbaya Yudhi Sadewa told The Jakarta Post that consumers’ optimism over the economy should stimulate bigger spending behavior. “The consumer index was low in August due to the increase of staple food prices,” he said. “But, it rose again in September when prices were relatively stable.”

Aviliani, an economist from the Institute for the Development of Economics and Finance (INDEF), agreed that consumers were optimistic with the economy, saying that with the strengthening exchange rate, low inflation rate and the China-ASEAN Free Trade Agreement the economy would be looking good.

“Spending power is rising,” she said. “If we see that in the last five years, the growth of third party deposits has not been as large as credits. The fact shows the high consumption rate in Indonesia,” Aviliani said, adding that people needed to question the contrary results of the survey.