Consumer spending to remain robust<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
A stable macroeconomic condition would continue to drive consumer
\nspending up in the second semester of this year, with demands on
\nitems such as electronics, motorcycles and cars to remain
\nbuoyant, experts said.<\/p>\n
The Indonesian Automotive Industry Association (Gaikindo) and
\nthe Indonesian Motorcycle Industry Association (AISI) predicted
\nthat demands would remain robust for the rest of the year even
\nafter strong sales in the first half.<\/p>\n
AISI deputy chairman Gunadi Sindhuwinata said the strong
\ndemand for motorcycles are such that the industry would have to
\nspeed up its production just to keep up.<\/p>\n
\"To anticipate the strong demand, over 2.5 million
\n(motorcycles) would be produced this year,\" Gunadi said over the
\nweekend.<\/p>\n
In the first six months, motorcycles sales reached 1.06
\nmillion units, or almost less than a 50 percent increase from the
\nsame period of last year, which stood at some 660.000 units.<\/p>\n
Gaikindo chairman Bambang Trisulo concurred, saying that the
\nassociation was optimistic to be able to post a second semester
\nsales volume at least at the same figure it had recorded in the
\nfirst semester, which was around 158.000 unit of cars.<\/p>\n
\"That would go in line with the association target to push the
\ncars sales into 320.000 unit by year-end,\" Bambang said. Last
\nyear, the total cars sales volume reached almost 300.000 units.<\/p>\n
The two agreed however that a stable macroeconomics
\nindicators, as it has been since the beginning of the year, would
\nplayed big part in either flourishing or disrupting the trend.<\/p>\n
The country's macroeconomic condition has been relatively
\nstable during the first six months period, although there is now
\nsome fears that the rupiah could weaken again as a result of
\nstrong demands from companies to repay foreign debts. A drop in
\nthe value of the rupiah against the U.S. dollar could trigger
\ninflation because the country's production system is heavily
\ndependent on imported raw materials. This would in turn eat up
\ninto the people's purchasing power.<\/p>\n
A stable exchange rate should then be maintained, as it would
\ngreatly help check inflationary pressure.<\/p>\n
Not only will a lower inflation give only little pressure on
\nthe prices, but will also force the central bank to lower its
\nbench-mark interest rate.<\/p>\n
A lower interest rate would encourage the people to spend
\ntheir money on goods rather than saving in the banks.<\/p>\n
All this would spur well to the current trend of high consumer
\nspending, the backbone of domestic consumption, which has been
\nexpected to become the main engine for this year's 4 percent
\neconomic growth amid disappointing foreign direct investment and
\nexport performance.<\/p>\n
So it is crucial to retain all those supporting factors.<\/p>\n
Exports dipped to US$22.285 billion between January and May
\nfrom $24.503 billion in the same period of last year.<\/p>\n
Foreign direct investment (FDI) approvals plunged by 59
\npercent to $1.67 billion from $3.98 billion posted during the
\nsame period last year. Domestic investment also showed a drop in
\napprovals during the same period from Rp 12.7 trillion in 2000 to
\nRp 9.4 trillion last year.<\/p>\n
Lee Kang-hyun, an executive at the Indonesian Electronics
\nProducers Association (Gabel), was also optimistic that
\nelectronics sales would be increasing in line with rising demand
\nas costumers feel they better off spending their money than keep
\nit banks.<\/p>\n
Gabel expects sales of TV, refrigerators, washing machines and
\nother home appliances would be on the increasing trend.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/consumer-spending-to-remain-robust-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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