Consumer confidence index falls to 26-month low

Consumer confidence index falls to 26-month low

Bank Indonesia's consumer confidence index fell last month to the
lowest in more than two years after the government raised fuel
prices on Oct. 1.

An index measuring confidence dropped 13.1 points to 76.9 in
October from 90.1 in September, according to the central bank
survey of 4,350 households in 16 cities. That was the lowest
since August 2003.

An index number exceeding 100 indicates more optimists than
pessimists.

"Higher prices and a decrease in income because of a decrease
in sales at businesses led to the drop in the index," the central
bank said in a statement on its Web site.

"Consumers optimism for economic outlook for the next six
months decreased."

Indonesia's inflation rate surged last month to a six-year
high after President Susilo Bambang Yudhoyono's government on
Oct. 1 more than doubled, on average, fuel prices for consumers
to cap energy subsidies that have eroded investor confidence in
the country's finances and caused the currency to plunge.

Bank Indonesia has raised its key interest rate five times
since July, with a record 1 1/4 percentage point increase on Nov.
1 aimed at curbing inflation and bolstering the currency taking
the rate used as a reference for bill sales to 12.25 percent.

Higher borrowing and fuel costs resulted in a decline in car
and cement sales in October.

Cement sales by companies such as PT Semen Gresik and smaller
rival PT Indocement Tunggal Prakarsa fell 5.1 percent to 3.4
million tons last month from a year earlier.

Car sales in Indonesia fell 20 percent to 35,103 units in
October from 44,044 the previous month after declining 13 percent
in September, according to figures from PT Toyota-Astra Motor,
the local unit of Toyota Motor Corp., which are compiled from
data from the Association of Indonesian Automotive Industries.

Motorcycle sales fell to 452,876 units in September from
504,787 units in August.

Indonesia's economy expanded 5.3 percent in the three months
to Sept. 30 from a year earlier after gaining 5.8 percent in the
previous quarter.

That was more than the median forecast of 5.1 percent growth
in a Bloomberg survey of 12 economists.

The expansion was led by government spending which rose 16.2
percent after contracting 5.7 percent in the previous quarter.
-- AP