Consumer confidence continues to fall

The Jakarta Post, Jakarta

Consumer confidence in the country fell for the third consecutive month in December due to perceived higher threats of inflation and fears of rising unemployment, according to the Danareksa Research Institute.

In the latest monthly survey carried out by Danareksa, the Consumer Confidence Index declined to 100.5 in December from 105.6 in the previous month.

The Index failed to claw its way back from a continued slide of sentiment throughout the last quarter of last year, after rebounding in the third quarter.

The Index jumped to 112.3 in August from 94.1 in July, following the relatively smooth succession of the country's presidency from Abdurrahman Wahid to Megawati Soekarnoputri in late July.

The Index started declining to 107.7 in October due to a loss of momentum caused by the lack of any fundamental change in the economy, and continued to fall to 105.6 in November.

Elsewhere, Danareksa said the Present Situation Index dropped to 82.5 from 89.5 a month before, while the Expectations Index slid to 114.1 from 117.7, as weakened economic conditions in December weighed upon confidence that the country's economic recovery might stand in the offing.

It said that the Consumer Confidence in the Government Index slipped to 130.9 in December from 132.7 a month earlier, emphasizing the deterioration of optimism over how fast the government could address the issue of slowing economic growth and inflation.

The agency said that the combination of higher costs of living and weaker job demand had pulled consumer sentiment virtually to a threshold of pessimism, as consumers felt the heat in December from the government's plans to raise fuel prices, electricity and telephone rates in early 2002.