Consumer confidence up again: Danareksa

The Jakarta Post, Jakarta

Consumer confidence rose in June for the fifth consecutive month, paving the way for even greater consumer confidence, the Danareksa Research Institute said on Tuesday.

Danareksa said its latest survey showed that the consumer confidence index (CCI) increased to 101.4 from 99.3 in May.

Danareksa said that people were more optimistic about the pace of the economic recovery.

The optimism was reflected in the rise in the index gauging confidence in family income prospects, which jumped 5 percent to 117.3, and the higher percentage of respondents ready to purchase durable goods in the next six months from 24 percent to 27.7 percent.

A greater number of respondents also believed that inflation and interest rates would continue to decline, and pressure on the rupiah would continue to subside.

However, Danareksa warned that despite the upbeat assessment on the economy, there were declines in both the current recruitment index and employment index.

The index which measures sentiment on current recruitment fell 6.2 percent to 60.7, while the index on employment prospects slipped from 100.8 to 97.9.

This appears to reaffirm lingering pessimism that the government can not generate economic growth at a level that can reduce unemployment.

The government is targeting economic growth of 4 percent this year, to be driven mainly by strong consumer spending. But experts have said that in order for the economy to be able to reduce the large number of unemployed, it must grow at pre-crisis levels of around 6 percent.

In compiling the monthly CCI survey, Danareksa and AC Nielsen interviewed at least 1,700 households in six main areas across the country.

The index ranges from a score of zero to 200, with zero meaning very pessimistic and 200 very optimistic. If the index is below 100, pessimistic responses outnumber optimistic ones. if the index is above 100, the reverse is true.