Confidence Surveys Suggest Consumers And Businesses See Better Times Ahead
Both consumer confidence and business sentiment continued to improve in June, driven by expectations of increased spending by political campaigns ahead of Wednesday’s presidential election, two polls released on Monday showed.
The Bank Indonesia Consumer Confidence Index, which surveyed about 4,600 households in 18 cities, showed that confidence rose to 109.1, up 3.2 points from the previous month and 30 points from the same period last year.
A reading of more than 100 indicates that consumers are optimistic overall about the economic outlook.
The index was at its lows in June 2008 at 79.1 points, with pessimism then driven by the government’s announcement of a fuel price increase the previous month.
“The rise in campaign spending due to the presidential election and improvements in macroeconomic indicators like the gross domestic product and inflation [rates] have contributed to increased consumer confidence about the economy,” the central bank said in a statement published on Monday.
While it projected slower economic growth in the second quarter - between 3.7 percent and 4 percent, compared with 4.4 percent in the first quarter - BI said it remained optimistic that the nation’s economy could expand by 4 percent for the full year.
The central bank also forecast that year-on-year inflation would fall below 5 percent by year’s end, given the effect of the fuel cost increase on 2008’s price levels.
The BI report also revealed that consumers were increasingly positive about their income prospects for the rest of the year, as well as how the economy as a whole would perform in the next six months.
Consumers also expect prices to rise in both the coming three- and six-month periods because of the Idul Fitri and Christmas holidays.
Meanwhile, a business sentiment survey conducted by the Danareksa Research Institute, a unit of state-owned brokerage firm PT Danareksa Sekuritas, showed that businesspeople were also feeling more upbeat about the economy.
DRI’s Business Sentiment Index for May-June showed an increase of 20 points from a 98 point reading in November-December 2008, the last time the survey was taken.
DRI’s Expectations Index, which measures three- to six-month outlooks, rose 2.4 points to its highest level in more than a year, 133.1 points, indicating that businesses believed the economy and corporate performance would soon pick up.
“The strong gains in business sentiment over the last six months add further weight to our contention that the economy has now bottomed out and that it is set to expand at a brisker pace in the months ahead,” DRI said.
The Bank Indonesia Consumer Confidence Index, which surveyed about 4,600 households in 18 cities, showed that confidence rose to 109.1, up 3.2 points from the previous month and 30 points from the same period last year.
A reading of more than 100 indicates that consumers are optimistic overall about the economic outlook.
The index was at its lows in June 2008 at 79.1 points, with pessimism then driven by the government’s announcement of a fuel price increase the previous month.
“The rise in campaign spending due to the presidential election and improvements in macroeconomic indicators like the gross domestic product and inflation [rates] have contributed to increased consumer confidence about the economy,” the central bank said in a statement published on Monday.
While it projected slower economic growth in the second quarter - between 3.7 percent and 4 percent, compared with 4.4 percent in the first quarter - BI said it remained optimistic that the nation’s economy could expand by 4 percent for the full year.
The central bank also forecast that year-on-year inflation would fall below 5 percent by year’s end, given the effect of the fuel cost increase on 2008’s price levels.
The BI report also revealed that consumers were increasingly positive about their income prospects for the rest of the year, as well as how the economy as a whole would perform in the next six months.
Consumers also expect prices to rise in both the coming three- and six-month periods because of the Idul Fitri and Christmas holidays.
Meanwhile, a business sentiment survey conducted by the Danareksa Research Institute, a unit of state-owned brokerage firm PT Danareksa Sekuritas, showed that businesspeople were also feeling more upbeat about the economy.
DRI’s Business Sentiment Index for May-June showed an increase of 20 points from a 98 point reading in November-December 2008, the last time the survey was taken.
DRI’s Expectations Index, which measures three- to six-month outlooks, rose 2.4 points to its highest level in more than a year, 133.1 points, indicating that businesses believed the economy and corporate performance would soon pick up.
“The strong gains in business sentiment over the last six months add further weight to our contention that the economy has now bottomed out and that it is set to expand at a brisker pace in the months ahead,” DRI said.