Consumers lose confidence in future of economy: Survey

Consumers lose confidence in future of economy: Survey

JAKARTA (JP): The consumer confidence index in October fell by
14 percent to 52.2 from 60.6 the previous month, indicating a
loss in consumer confidence in the future of the country's
economy, according to a survey made by Danareksa Research
Institute.

"Optimism toward a better life remains high, but its level has
plunged," it said, explaining that an index reading above 50
indicates that positive responses outnumber negative ones.

The institute said consumers were no longer as confident as
they were before on current conditions, and their optimism level
had dropped 16.7 percent to 33.8 from 40.5 in September.

Expectations for things to be brighter in six months also
dropped to 66 from 75.7 or 12.9 percent previously.

"The plummet in the present situation index has been in step
with the worsening conditions in the country," the institute
said.

The survey also indicated an overall decline in the present
and expectation indices which, if not given immediate attention,
had the potential of dragging down the country's growth level, it
said.

Although a solid downward trend has not yet surfaced, results
from the survey over the past six months suggest that the index
exhibits a seesawing pattern with a downward trend, the institute
said in a statement.

"This pattern is of concern as the oscillation of hopes among
consumers underpins the falsification of past hopes for a better
life leading to a self-perpetuating pessimism," it said.

Consumers have lost substantial confidence in the future of
Indonesia's overall economy and the local economy where they
live, it said, adding that they have also lost confidence in
their job, career and family income.

"They are not as sure as they were before of the present
condition of the national and local economy, and job
availability," it said.

The institute said that endless bickering among the nation's
top leaders had caused a higher degree of uncertainty about how
the country was going to be governed.

The emergence of some issues as well as unpleasant events in
Atambua, Wamena, Maluku, North Maluku and Aceh during the past
month have also caused uncertainties about the future.

Amid the grim global outlook, falls in Indonesian financial
assets, both in the rupiah and stocks, appear to also cause
consumers to be less confident in what to do now and in six
months time, the institute said.

The survey also indicates a less upbeat near-term expectation,
with the expectations index in the local economy falling by 12.1
percent, the index measuring employment security sliding by 9.3
percent and the index measuring family income falling by 10.9
percent, it said.

"Some cooling in growth is not yet at work but it is already
in sight," the institute said.

Consumer confidence is designed to measure the mood of
consumers toward buying, helping to predict buying patterns. It
is designed to capture the effect of events that may affect
buying patterns, but are not immediately reflected in other
economic indicators.

The survey is based on a sample of at least 1,700 Indonesian
households across six different main areas, and conducted for
Danareksa Research Institute by AC Nielsen.

The sample for this national survey is selected to represent
Indonesian consumer characteristics, demographically and
economically. (tnt)