Indonesia's Consumer Confidence Recovers From Fuel-Price Shock
Indonesia's Consumer Confidence Recovers From Fuel-Price Shock
Bloomberg/Jakarta
Indonesia's consumer confidence rose in May as citizens began recovering from the shock of fuel price increases in March that pushed inflation to its highest in more than two years.
The consumer confidence index rose 5.7 points to 94.2 in May from April, according to Danareksa Research Institute in Jakarta, which commissioned ACNielsen to survey 1,700 respondents in six areas. An index number exceeding 100 indicates more optimists than pessimists. The survey has a 2 percent margin of error.
"As push comes to shove, people strained to realign their life anyway to higher oil prices and their unseemly effect on pushing other prices of products higher that initially looked so hard to bear but finally have worked their way through the system," Danareksa Research Institute's Stefanus P. Susanto and David Sumual wrote in the report.
The survey showed more pessimists than optimist among both urban and rural dwellers in May, even as more people expected to find work. The urban confidence index rose to 95.6 from 89.2 in April and the rural confidence index to 90.7 from 88.8.
As many as 40 million of Indonesia's 238.5 million people are either unemployed or work fewer than 35 hours a week, according to the government. The economy, Southeast Asia's largest, grew 5.1 percent last year and the government has forecast growth of 6 percent this year, which would be its fastest in nine years. Consumer spending drives about 70 percent of Indonesia's economy. "People feel confident in a plausible upgrade of their family income status in the months up to November," Susanto and Sumual wrote. Consumer prices rose 8.8 percent in March from a year earlier, the fastest pace in at least 26 months after the government cut fuel subsidy and fuel prices surged. Inflation slowed in April and May. Danareksa Research Institute is a unit of state-owned investment bank PT Danareksa. Below are some key findings of the monthly survey: *T Index May Apr Mar ------------------------------------------------------------- Consumer confidence index 94.2 89.1 90.2 Present situation index 74.2 70.9 73.4 Expectations index 109.2 102.7 102.8 Urban consumer confidence index 95.6 89.2 91.7 Rural consumer confidence index 90.7 88.8 86.6 *T