Consumers heartened by Mega's ascension

Consumers heartened by Mega's ascension

Adianto P. Simamora, The Jakarta Post, Jakarta

Consumer confidence soared sharply in August due to the country's leadership succession, according to the recent consumer confidence survey conducted by Danareksa Research Institute.

Danareksa said on Wednesday that the consumer confidence index increased to 112.3 in August from 94.1 in July, which was the first increase after it had fallen below 100 since March due to domestic political uncertainty.

Danareksa, however, stressed that the index increase did not produce any major changes in the country's economic fundamentals as it merely reflected a change in sentiment following the successful transfer of power to President Megawati Soekarnoputri from Abdurrahman Wahid in late July.

The rupiah soared to around Rp 8,500 per U.S. dollar in August following the election of Megawati and the forming of a credible cabinet team. The rupiah hovered at between 10,000-11,000 when Abdurrahman faced mounting pressure from legislators to step down.

The institute surveyed some 1,700 households in six different areas to measure the buying pattern of consumers and its effect on the economy.

Elsewhere, Danareksa said the present situation index and the expectation index also rose in August to 83.4 and 133.9 from 73.6 and 109.3 respectively.

"The 22.5 percent rise in the expectation index reflected a bullish expectation that the new President would be able to start solving the country's political and economic woes," Danareksa said.

The consumer confidence in the government index (CCGI) increased to 152.6 from 105.8.

"The rise in the CCGI showed that the public were confident of the government's ability to meet consumers' expectations in all provinces as well as its ability to woo back investors and rebuild the economy," Danareksa said.