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fter declines reported in two consecutive surveys, consumer confidence seemingly rebounded in May 2012, with the Consumer Confidence Index (CCI) rising sharply by 9.5 percent to 91.3 from 83.4 in April according to a survey conducted by Danareksa Research Institute (DRI).

Stronger consumer confidence in May was largely due to decreasing concerns on higher prices of basic foodstuffs coupled with improving sentiment on the state of the economy, the survey indicated.

“Rising food prices were mentioned as a major concern by 67.7 percent of consumers surveyed in May, down from 73.4 percent in April,” the report added. The declining concern was attributable to, among others, the smaller chance of the subsidized fuel price increase. The fuel price increase usually pushes up the price of goods, including prices for foodstuffs.

The two main components of the CCI rose in May. The first — the component measuring consumer sentiment toward current conditions, the Present Situations Index (PSI), jumped 12.4 percent to 76.2, as sentiment toward economic conditions, both nationally and locally, improved. The other CCI component, measuring consumer sentiment toward the future (the Expectations Index) climbed 8.0 percent to 102.6, reflecting greater optimism on how the national economy will perform in the next six months.

With consumers more upbeat on the country’s economic prospects, buying intentions for durable goods strengthened in May to their highest level in the last five months, DRI said in its report.

According to the latest survey, some 35.3 percent of consumers have plans to purchase durable goods over the next six months; or more than in the previous month when some 34.0 percent of consumers expressed plans to purchase durable goods. This is an encouraging finding because consumers tend to prioritize purchases of clothes and other basic needs ahead of Ramadhan and Idul Fitri — which this year will fall in July and August — rather than spend money on durable goods.

In the latest survey, consumers said they expected inflationary pressures to ease slightly over the next six months. “Our latest survey reveals that slightly fewer consumers now expect general prices to increase [90.8% in May versus 91.8% in April],” DRI said.

Overall, the index measuring consumer sentiment toward general prices edged down 0.4 percent to 190.2 in May. Nevertheless, this index is still way above the neutral level of 100, meaning that the price increase is still a pressing problem that needs to be addressed.

Consumer confidence in the government rebounded in May. The survey showed that the Consumer Confidence in the Government Index (CCGI) rose 5.5 percent from a record low of 74.6 to 78.8 in May.

In the latest survey, all components that make up the CCGI posted increases, except the component of the CCGI measuring sentiment toward the government’s ability to provide and maintain public infrastructure, which fell 1.0 percent to 94.8. This component, increasing the most measured sentiment toward the government’s ability to stabilize prices, soared 16.3 percent to 60.0 in May. Prices did not increase as expected after the cancellation of the price hikes for subsidized fuel that were initially planned for last April.