Wednesday, 18 December 2013

CONSUMERS’ CONFIDENCE STILL ON THE UPTURN



Survey of Danareksa Research Institute in November 2013 unveiled that consumers’ confidence re-strengthened in November for the fourth time. After increasing by 1.8% according to survey in October, Consumers Confidence index inched up again by 1.2% to become 92.3 in November, the highest level in 7 months.

The improving consumers’ confidence in November was mostly due to negative public perception of Indonesia’s economic prospect. Besides, people’s anxiety of increased food was also reduced. Latest survey unveiled that around 71.8% of consumers were afraid of increasing food price had dropped from the previous 76.5% in October.

Meanwhile the portion of consumers who were worried about high oil fiel price also dropped to 18.7% in November against 26.9% the month before. Apparently the people were getting accustomed to the formed new prices after increase of oil price last June.

According to the latest survey outcome, consumers felt sure that inflation pressures would cool down in the next six months. The index which measured consumers’ sentiment on inflation dropped by 0.1% to become 190.7 in November. However, the index was still higher than the index of the same month last year. Broadly speaking inflation expectation for the next 6 months was among others due to price increase of goods and services toward year end due to low season and increasing need for food and clothes toward Christmas and New Year.

The main two components which formed IKK index increased in November. The first component, i.e. the component which showed the present condition [ISS[ rose by 2.4% to become 74.2 as consumers gave better rating to economic condition and employment opportunity. Meanwhile other IKK component which showed condition of the future [Expectation Index] was showing increase of 0.6% to become 105.9 in November, the highest level in the last 10 years. The IE increase indicated that people were getting more optimistic about economic prospect in the next six months.

With increased people’s optimism of economic prospect as a whole in the next 6 months, consumers’ plan to buy durable goods increased in November. Latest survey unveiled that around 31.6% consumers being surveyed planned to buy durable goods in the next 6 months, increasing by 30.4% in October. However, the level in November 2013 was still low compared to the level last year.

Meanwhile, consumers trust in the Government’s capability to manage all the great task also increased in November. After dropping 2 times consecutively IKK index on the Government [IKKP] rose by 1.2% to become 78.6% in November. In the last survey, 3 components which formed IKKP increased while 2 other components dropped. The component which showed highest increase was the one which showed Government’s capability to step up economic growth [related index rose by 4.6% to become 82.6% in November.] 

Business News - December 6, 2013

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