Consumer confidence falls in January to lowest level
The Jakarta Post, Jakarta
The consumer confidence index in January hit the lowest level in three years amid pessimism over the country's economic recovery, Danareksa Research Institute said in its latest monthly survey released on Tuesday.
Danareksa said the consumer confidence index plunged by 13.6 percent to 86.8 last month from the previous level of 100.5.
It said that the drop coincided with the fall in both the present situation index and the expectation index.
Danareksa said that the present situation index plunged to 69.3 from 82.2 reflecting the more difficult life endured by the public in January due to the increase in fuel and electricity prices and phone rates.
The institute said the expectation index dropped sharply to its lowest level of 100.0 compared to 114.1 previously as consumers were skeptical about the country's economic condition over the next six-month period.
The institute surveyed some 1,700 households in six different areas to measure the buying pattern of consumers and its effect on the economy.
The survey, however, said the public remained confident in the government that it could improve domestic security conditions.
"(But) most consumers appear to be unaware of the limitations (of) the cash-strapped government ... to deal with the enormous scale of the problem that inflicts the nation as a consequence of the past abuse of power," Danareksa said.
"The current government needed to pull the economy out of its inherited dilemma that has trapped the entire nation in a deep- rooted malady," it added.
Elsewhere, Danareksa suggested that the government boost efforts to attract foreign direct investment particularly in the energy sector to facilitate economic growth and help address the imminent power shortage as both fiscal and monetary stimulus look highly improbable.
"This investment would shore up sagging confidence in the economy, before consumers tighten their belts to fulfill their belief that the economy is truly heading down," it said.