Consumer Confidence Lower Over Jobs, Growth

Shoppers crowd Jakarta's Blok M Mall during last year's Ramadan. (JG Photo/Afriadi Hikmal)

Jakarta. Consumer confidence has declined in June amid concern over the availability of jobs and an expected slowdown in Indonesia’s economy in the next six months, according to a Danareksa Research Institute survey.

The consumer confidence index may decline 0.3 percent to 94.8 points in June, Danareksa said in a press statement on Wednesday.

An index reading of below 100 points represents pessimism, while a reading of over 100 points paints a picture of greater optimism.

The government’s official consumer confidence report, compiled by the central bank, is scheduled to be released today.

Anxiety over the unavailability of jobs and reports of fertilizer shortages in some parts of the country were primarily blamed for the slight drop in confidence, Danareksa said.

The report also found that on average, Indonesians feel less optimistic about the country’s economic prospects for the rest of the year, which, in turn, led to a decline in their desire to buy durable goods such as cars and household goods.

In the Danareksa study, which involved 1,700 households across the archipelago, 28.8 percent of respondents indicated that they planned to spend money on durable goods in the next six months.

This represents a 5 percentage point gap compared with 33.5 percent in May and 34.2 percent in June last year.

The central bank forecasts Indonesia’s $900 billion economy to grow at between 5.2 percent and 5.5 percent this year, down from an initial prediction at the beginning of the year of a growth rate of between 5.9 percent and 6.2 percent.

Indonesia’s rate of inflation eased to 6.7 percent in June from 7.3 percent in May, the Central Statistics Agency (BPS) said on Tuesday.

On the bright side, consumer confidence in the government’s ability to control prices grew 2.5 percent to 83.9 in June, continuing an upward trend since May.

By Vanesha Manuturi on 08:35 pm Jul 02, 2014