Consumer confidence index at lowest level

JAKARTA (JP): Indonesia's consumer confidence index slid to its lowest level of the year in April, threatening the stability of the already fragile economy, the Danareksa Research Institute said in a statement.

The Consumer Confidence Index crossed below the psychologically critical 100 level in April, falling to 98.5 from 101 in March as political and security concerns continued to harm sentiment, the institute said.

A reading below 100 means there are many more people who are pessimistic about the condition of the economy than there are those who are optimistic, it said.

The Present Situation Index and the Expectations Index also fell in April, going from 82.5 and 114.8 in March to 80.3 and 112.2, respectively.

Both indicators suffered from an absence of new developments to improve sentiment and from growing political uncertainty. Extremely damaging to sentiment was the warning by Coordinating Minister for Political, Social and Security Affairs Susilo Bambang Yudhoyono that the country was on the brink of collapse, Danareksa said in its report.

"Scaring people off is the likely arrival of another major hit to the economy as signaled by some prompt indicators," it said, citing the rapid descent of the rupiah against the U.S. dollar as one example.

Confidence in the overall economy dropped 5.9 percent in April, with the economic outlook still clouded by uncertainty over the fate of the country and the President, Danareksa said, adding that this condition was likely to linger until August.

The country is in the process of lurching from a political crisis into an economic crisis, the report said.

"The unpleasant confluence of spreading social unrest, the growing confrontation between legislators and the President and increasing budgetary pressures are capable of damaging the future of Indonesia if left unattended and unchecked," Danareksa added. (tnt)