Consumer index retreats after slight gains

Consumer index retreats after slight gains

JAKARTA (JP): Danareksa's Consumer Confidence Index in
retreated to 101 in February from 103.3 in January giving up most
of its gains eked out in the last couple of months as a result of
falls in the present situation and expectations indices.

The Danareksa Research Institute said on Monday that the index
measuring the people's assessment of the present economic
situation fell slightly to 82.5 from 83.0, suggesting that the
earlier gain was a knee-jerk reaction to a boost in cash flows in
January.

The index that measures people's expectations on their own
economic position over the next six months dropped 3.1 percent on
soaring uncertainty over where the country is heading, the
institute said.

It said that the people were also more uncertain about the
present situation partly due to the deterioration in the labor
market, with jobs becoming more difficult to find.

With security threats at the forefront of their expectations,
respondents anticipated a grim outlook for the overall economy,
the institute said.

"Consumers are less confident in their family income
expectations and this prompts them to save more of their current
income as part of a contingency buffer," it added.

As nobody is able to build a lucid and reliable picture of
what the future of the country, consumers are left with little
choice to minimize the consequences of the possible worsening of
the economy. This situation has also forced them to reduce their
spending on durable goods.

The institute said the proportion of the consumers' spending
for durables surveyed during the last six months dropped from
33.7 percent in January to 32.13 percent in February.

As politicians' risky behavior continues to snowball, with
force and violence becoming a normal way to resolve conflicts,
consumers opt to shun risks from heightening political
temperatures by getting financially prepared for safety
reasons.(05)