T

he weakness of the rupiah and layoffs in the real sector have raised concerns over domestic economic conditions and have forced consumers to hold off on spending, weakening consumer confidence to its lowest level in four years, a recent survey has shown.

The Nielsen Global Survey of Consumer Confidence and Spending Intentions revealed that the confidence of Indonesian consumers dropped four points to 116 in the third quarter, a level unseen since the third quarter of 2011.

The survey revealed that the level of consumer concern about the national economy increased nine basis points from the previous quarter to 46 percent. Almost three-quarter of respondents believed that the country was in recession, an increase from 63 percent in the last quarter.

'€œThree optimism indicators: future job prospects, personal financials and spending outlook, all declined,'€ said Nielsen Indonesia managing director Agus Nurudin in Central Jakarta on Wednesday. Agus argued that the declines had caused a lowering of consumer confidence.

According to Nielsen'€™s data, of the 523 Indonesians surveyed online during the period of Aug. 10 to Sept. 4, only 64 percent expressed optimism in their future jobs outlook. The number was down from 68 percent recorded in the second quarter.

The number of respondents who said they were confident in their future financial condition steeply declined to 64 percent from 80 percent in the previous quarter. Only 49 percent of total respondents, down four basis points, planned to spend money on secondary and tertiary needs.

'€œThe stronger greenback and the rising number of layoffs have affected consumer confidence,'€ Agus said.

The rupiah lost around 16 percent of its value from January to September this year. The currency, however, advanced around 7 percent in October, according to Bloomberg data.

Bank Indonesia'€™s (BI) consumer survey in September confirmed the Nielsen survey, revealing consumer confidence at 97.5, its lowest level in five years and below the 100-threshold that indicates pessimism.

Agus said that more than half of respondents decided to save and cut spending on gadgets, new clothes and out-of-home entertainment.

The finding is in line with Central Statistics Agency (BPS) data suggesting a slowdown in private consumption, measured at 4.99 percent in the second quarter this year, the lowest level since 2011.

Despite the gloomy indicators, the survey showed that Indonesian consumers were still among the top five most optimistic globally after India (131), the US (119) and the Phillipines (117). Regionally, North America (117) is the most confident region, followed by the Asia Pacific (106) and the Middle East and Africa (94).

Institute for Development of Economics and Finance (INDEF) director Enny Sri Hartati predicted on Wednesday that consumer confidence would see only a limited increase until the year'€™s end.

'€œThe BI consumer survey in October showed that confidence was slightly up to 99.3,'€ she said over the phone, adding that the increase was partly caused by the deflation rate, which stood at 0.08 percent in the same month.

Deflation, however, was not always a good signal, especially if it resulted from low demand in staple foods, for example.

Enny urged the government to maintain price stability by securing staple stocks to mitigate the risk of soaring food prices that could lower people'€™s confidence and further weaken their purchasing power.