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Indonesians scale back spending in February amid election
Central bank data show that the share of income used for consumption, also referred to as the propensity to consume, dropped to 73 percent in February from 74.6 percent in the preceding month.
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A vendor offers red chilies at his stall at Kramat Jati Market, East Jakarta, on March 12, 2024. Jakarta saw an increase in chili prices on Tuesday, the first day of Ramadan, with the staple food selling for Rp 100,000 (US$6.45) per kilogram, almost double the usual Rp 60,000 per kg. (Antara/Aprillio Akbar)
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onsumer confidence declined to 123.1 points in February, down 1.52 points from January, according to Bank Indonesia’s (BI) latest monthly report.
The figure came in higher, however, than the 122.4 points recorded in February 2023.
“The consumer confidence index (IKK) remains above 100, which indicates optimism. This indicates that consumers' confidence in the economy remains strong,” BI spokesman Erwin Haryono said in a statement on Wednesday.
The country held a general election on Feb. 14. Consumer spending typically increases in the months leading up to elections in Indonesia as campaign teams fork out on public events, but elections also add to uncertainty about the economic course of the country.
Consumer confidence dipped across four of five income groups in BI’s data, with the deepest month-to-month (mtm) drop seen in those earning between Rp 4.1 million (US$263.22) and Rp 5 million.
Respondents to BI’s survey expressed less confidence regarding their income and job prospects in February, with the corresponding subindexes dropping by 3.77 percent and 7 percent mtm, respectively. They were also less inclined to purchase durable goods, which include long-lasting consumer products like cars and furniture.
However, BI noted that consumers were upbeat about the next six months, with confidence about income and jobs improving by 2.9 percent and 2.46 percent mtm, respectively, but their plans for purchases of durable goods did not reflect the same optimism as the subindex declined further.
