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Consumer surveys paint bleak picture of Indonesia's economy
Bank Indonesia’s Consumer Confidence Index in July dropped for the third consecutive month, with its consumer perception of “availability of jobs” component falling to “pessimistic” territory. Nielsen Indonesia also found that consumer concern about the economy went up sharply to 37 percent in the second quarter from 31 percent in the previous quarter.
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Customers crowd a supermarket in Mampang Prapatan, South Jakarta. (The Jakarta Post/Wendra Ajistyatama)
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onfidence among Indonesian consumers is deteriorating, according to recent surveys, as concerns over a lack of jobs mount and secondary spending drops against the backdrop of sluggish domestic economic growth.
Bank Indonesia’s Consumer Confidence Index in July dropped for the third consecutive month, with its consumer perception of “availability of jobs” component falling to “pessimistic” territory. Nielsen Indonesia also found that consumer concern about the economy went up sharply to 37 percent in the second quarter from 31 percent in the previous quarter.
The central bank’s consumer confidence index dropped to 124.8 in July from 126.4 in June. Although the confidence index stayed in the “optimistic” zone, one of the key components for the Economic Condition Index, “availability of jobs”, fell into “pessimistic” territory at 96.6 in July from 101 in June.
“The global slowdown has had an impact on the domestic economy, resulting in weak commodity prices in some affected areas,” said state-run Bank Mandiri chief economist Andry Asmoro. “The lower-middle class consumers still need the government’s social assistance to help strengthen their purchasing power.”
Indonesia’s economic growth slowed to 5.05 percent in the second quarter of this year, down from 5.07 percent in the previous year, despite high consumer spending that accounts for more than half of the country’s economy, supported by the Idul Fitri holiday and general election, Statistics Indonesia (BPS) reported on Aug. 5.
“Indonesia missed the opportunity to boost its economy when there were payroll bonuses and remittances from overseas workers during Idul Fitri and spending for the general election in April, an increase in consumer spending in the second quarter,” said Institute for Development of Economics and Finance (Indef) executive director Tauhid Ahmad on Aug. 7.
The trend is reflected in the way Indonesians utilize their spare cash, as consumer concern about the state of the country’s economy spiked in the second quarter, said Nielsen Indonesia managing director Agus Nurudin.
