Consumer confidence on November highest in 2003

Consumer confidence on November highest in 2003

The Jakarta Post, Jakarta

Consumer confidence in November rose to its highest level in
2003 on the back of soft inflation and large holiday bonuses that
allowed consumers to spend generously, a survey said on Monday.

The consumer confidence index rose by 3.6 percent in November
to 95.6. Fewer work days and Idul Fitri bonuses enabled consumers
to celebrate the Islamic holiday within a more jubilant
atmosphere, boosting confidence in the economic recovery.

"People felt much better with regard to what went on during
November in their economic environment," the survey said.

It said people felt more sure that the momentum of the current
recovery would continue, to generate more jobs and provide them
with opportunities for improvement in family income in the six
months to come.

The Danareksa consumer confidence survey is based on a
representative sample of 1,700 households in six different main
areas and on face-to-face interviews.

Consumer confidence is designed to measure the mood of
consumers with regard to purchases, which can help predict buying
patterns.

Confidence in the security situation boosted consumer
confidence in November as people were not concerned about their
safety compared with last year, after the Bali bombings on Oct.
12.

"People had little reason to feel downhearted on this joyful
occasion, but much to cheer them up, as the environment around
them was favorable," the survey remarked.

High levels of optimism in the country's economy have also
boosted people's confidence in the government's ability to
improve growth, cap rising inflationary pressures, improve
deteriorating infrastructure, restore security and order, as well
as uphold the law.

The consumer confidence in government index (CCGI) bounced
back 6.2 percent to 125.3, the highest since December 2001, with
all components rising strongly.

The government's ability to control inflation has contributed
to boosting the consumer confidence level, as the index is up by
a whopping 11.5 percent.

While positive sentiment has buoyed consumers across the
country, the survey said the future economy would still rely on
consumer spending levels going upward in a consumer-driven
economy.

The survey shows that the appetite of consumers to spend on
durable goods has shrunk because people foresee the likelihood of
higher interest rates.

People saw that one-month central bank benchmark interest
rates (SBI) had clearly moved upward throughout November,
dissuading them from committing themselves to any big
transactions that called for monthly interest-bearing repayments,
until the direction of rates became clear.

Danareksa said any temporary reversal of rate direction, if
not finely tuned, might spoil a recovery in the making.