Consumer index down in August: BI

Consumer index down in August: BI

The Jakarta Post, Jakarta

The consumer confidence index -- which measures the people's
perspective on the economic situation -- declined in August, Bank
Indonesia said over the weekend in its latest report.

The August index was lower at 76.3 from 81.8 posted the month
earlier.

The rising pessimism reflected people's declining confidence
in the prospect of family income, the central bank said.

The report came amid improving macroeconomic indicators as
inflation has eased, interest rates are down and the rupiah has
strengthened.

Analysts, however, have said that the improving macroeconomic
picture has yet to translate into higher investment activities.
Investment is seen as crucial to help push economic growth to be
able to generate more jobs for the millions of unemployed.

The high unemployment rate in the country is weakening
people's purchasing power.

The Bank Indonesia report said that the index that shows the
number of consumers who think that buying durable goods was now
the right time also fell to 65.2 percent from the previous
month's 70.9 percent, something that could weaken consumer
spending.

While the report did not elaborate on what impact it could
have on the economy, the decreasing consumer confidence would
prove costly to the economy, which heavily relies on domestic
consumption. The government expects the economy to grow by 4
percent this year, with domestic consumption as the main growth
engine amid weak exports and investment performance.

The survey also revealed that people's expectations of the
economy in the next six months to 12 months were lower, dropping
from 107.2 in July to 90.5 percent in August.