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Consumer confidence drops, retail sales sluggish ahead of spending season
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A batik producer creates cloth face masks in the red and white of the Indonesian flag in Kedungmundu, Semarang, Central Java, on July 24, 2020. (Kompas/P. Raditya Mahendra Yasa)
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onsumer confidence has re-entered a downward trend after a brief rebound, while minuscule annual growth in retail sales does not bode well for household spending just weeks head of the year-end festive season.
According to data published by Bank Indonesia (BI) on Thursday, the consumer confidence index (CCI) in November dropped by 1.2 points to 119.1, but at that level it remains higher than the 117.2 recorded for September.
The current economic conditions subindex stumbled by two points to 110.3, while the expectations subindex fell by 0.4 points to 127.9, the third-lowest reading seen this year.
Although remaining above the threshold of 100 points, which is considered optimistic territory, the figure is just 1.9 points above the five-month low hit in September, when the government hiked fuel prices.
The CCI takes into account public sentiment regarding the macroeconomic environment as a whole as well as views on personal income and employment prospects. How positive people feel about these factors influences their willingness to spend and hence also impacts overall consumer spending in the country.
“The current economic conditions index was seen to remain optimistic, although it fell slightly, in line with the correction in the current income index, job availability and durable goods purchasing,” the central bank’s communication director Erwin Haryono said on Thursday.
Read also: Indonesia consumer confidence plunges to five-month low
