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Jakarta Post

Consumers less upbeat about the economy in next six months

  • Marchio Irfan Gorbiano

    The Jakarta Post

Jakarta   /   Mon, July 8, 2019   /   03:29 pm
Consumers less upbeat about the economy in next six months The Bank Indonesia (BI) building on Jl. MH Thamrin in Central Jakarta. (Shutterstock.com/GeorginaCaptures)

Bank Indonesia’s (BI) latest assessment on the country’s consumer confidence revealed that domestic consumers have a largely optimistic outlook on the present economic situation, although they are less upbeat in their expectations for the next six months.

The consumer confidence index (IKK) was down to 126.4 in June from 128.2 in the previous month as consumers were less upbeat about business activities, income and job availability over the next six months.

The IKK is a monthly survey conducted by the central bank to measure consumer confidence over the current economic conditions, as well as consumers’ expectations for the near future. Indicators below 100 signal that consumers have a pessimistic outlook, while an index above 100 indicates optimism about the economy.

The central bank said in a statement that the relatively optimistic outlook on the present economic situation was driven by consumers’ confidence in purchasing durable goods, jobs availability and income compared to the situation six months ago.

The present situation index (PSI) rose by 1.2 points to 114.7 in June, compared to 113.5 in the previous month. Meanwhile, the expectation index (EI) dipped to 138.1 in June from 142.9 in the previous month.

The survey’s results also indicate that consumers expect price pressures to decline in the next three months, before bouncing back over the next six months thanks to increased demand for goods and services at the end of the year.

“The decrease in consumers’ expectation on price pressures in the next three months was driven by the relatively stable supplies of consumption goods and smooth distribution of the goods,” BI said in a statement on Monday. (bbn)