Consumers upbeat over economic outlook: Survey

Consumers upbeat over economic outlook: Survey

JAKARTA (JP): Indonesian consumers have confidence that the
economy is on the rise and economic conditions will improve over
the next six months, according to a March consumer confidence
survey held by Danareksa Research Institute.

The institute said that for the first time since October 1999,
the percentage of consumers claiming current conditions were good
outweighed the percentage claiming otherwise.

The institute, a unit of state-owned Danareksa Securities,
said consumers remained upbeat on the economic outlook despite
domestic social and political uncertainties.

"The positive expectations typically point to the active pace
of economic recovery underway and underline the characteristics
of an economy that is at the incipient stage of a business cycle
upswing," Danareksa said in its survey of some 1,725 Indonesians.

Danareksa said the positive view on the current economic
condition was attributed to improvements in the current overall
economic and job market conditions.

Danareksa said that although the majority still believed jobs
were difficult to find, the proportion of optimistic responses
was increasing compared to its February survey.

It said that most respondents anticipated that general prices
would be higher in the next six months due to the expected higher
fuel and electricity prices.

The government raised electricity rates early this month and
plans to increase fuel prices in the near future.

"In line with the expectations of higher prices, the majority
of consumers in major cities continue to expect interest rates to
rise," Danareksa said.

"Just like in the previous survey, consumers in major cities
continue to be bearish over the value of the rupiah," it added.

"Another troubling trend is that consumers in major cities are
rather cautious in their expectations for stock prices, despite
the fact that the number of optimists still outnumbers that of
pessimists," it said.

It said the recent announcement of the delay in the
disbursement of International Monetary Fund loans appeared to be
the reason behind the consumers' negative responses on the rupiah
and stock price outlooks.

The IMF delayed the disbursement of its US$400 million loans
to the country initially scheduled to be made earlier this month
because the government failed to meet its end-March deadline in
completing various economic reforms.

But the IMF said late last week that it would disburse the
loans later in May after the government managed to complete the
reform programs on April 8 and April 12.

Indonesia has been under the intensive care of the IMF after
the economy was hit by the economic crisis that started in the
middle of 1997.

But there are signs that the economy is improving. Bank
Indonesia expressed confidence last week that the 3 percent to 4
percent gross domestic (GDP) growth and "underline" inflation of
3 percent to 5 percent target this year could be attained.

Danareksa, however, said the prospects of economic recovery
continued to be overshadowed by the fact that only 30 percent of
the respondents intended to buy durable goods in the next six
months.

"The results of the survey indicate that respondents will
remain skeptical of private consumption spending over the next
two quarters," it said. (rei)