Consumer Confidence Index Falls for Two Consecutive Months, Early Warning Signal as Public Begins to Curb Spending

JAKARTA, KOMPAS.com - The decline in the Consumer Confidence Index (IKK) for two consecutive months in February and March 2026 is seen as an early warning signal that the public is beginning to restrain their spending pace.

Based on a Bank Indonesia (BI) survey, the IKK continued to fall from a level of 127 in January to 125.1 in February. In March, the index experienced a deeper decline to 122.9.

Bank Permata’s Chief Economist Josua Pardede stated that although it has contracted, the IKK remains well above the 100 threshold, indicating that consumers are still in an optimistic zone.

This should not be immediately interpreted as the public’s confidence in the economy suddenly disappearing. Rather, it is an early warning signal that society is starting to be more cautious in making consumption decisions.

“In other words, consumption has not slowed sharply yet, but confidence in continuing aggressive spending is beginning to soften,” he told Kompas.com on Friday (10/4/2026).

In February, the decline was more driven by weakening future expectations, while the current conditions remained relatively strong. This is evident from the increase in the Current Economic Condition Index (IKE) to 115.9 and the decline in the Consumer Expectations Index (IEK) to 138.8.

Then in March, that doubt widened to not only weakening future hopes but also current consumption decisions, particularly those related to spending on durable goods and perceptions of job availability.

This is reflected in the IKE and IEK both declining to 115.4 and 130.4. The decline in IKE was caused by falls in the Durable Goods Purchase Index and the Job Availability Index, while the decline in IEK was due to drops in the Income Expectations Index, Job Availability Expectations Index, and Business Activity Expectations Index.

“So, the decline over the last two months indicates a shift in behaviour from optimistic to more cautious. It has not yet reached the phase of sharp consumption tightening, but it has entered the phase of more careful calculation,” he said.

From a global perspective, rising uncertainty due to geopolitical conflicts, rising energy prices, financial market volatility, and limited room for monetary policy easing are also pressuring household perceptions.