Fri, 17 Mar 2000

Local consumers confidence back at precrisis level: Survey

JAKARTA (JP): Indonesian consumers are more optimistic about the future of the country's economy and their own income and quality of life today than in recent years, a survey conducted by Mastercard International has found.

The MasterCard International country manager, Bambang Gunawan, said the MasterIndex survey found the level of Indonesian consumer confidence increased to reach an average of 90.3 at the end of last year, up from 82.1 in June last year and 15.3 in 1998.

"In conclusion, the confidence of Indonesian consumers in the future of the country's economy and their financial life has definitely returned to the precrisis levels."

He said consumers responded that they were particularly optimistic about an improvement in their income and more employment opportunities.

The positive perceptions of consumers is good news for interested parties such as banks and consumer goods producers, he added.

"We cannot guarantee that the significant increase in the level of confidence of consumers will automatically result in an equivalent increase in consumer spending, including credit card use," he said.

"But at least the indications found in the survey can be used as consideration by banks or retailers in developing a short-term strategy for their customer services."

He said the company expected that the upbeat perception showed by Indonesian consumers in the survey would encourage local banks to resume promoting their credit card products.

The country's economic collapse which began in mid-1997 and resulted in the dramatic drop in consumer purchases led many banks to be extremely selective in awarding credit cards to new applicants to avoid bad debts.

Bambang said the growth in the number of credit card holders was especially stagnant last year, although the transaction volume increased 30 percent, apparently a result of the surge in prices since the crisis.

He said the MasterIndex survey was aimed at collecting information on consumer views and expectations on particular economic factors: economic outlook, employment, regular income, the stock market and quality of life, for the next six months. It is conducted twice a year in 13 countries including Indonesia, the Philippines, Thailand, Japan, Australia, South Korea, Malaysia, Singapore and New Zealand,

He noted, however, that political aspects were not included in the survey.

Indonesian consumers ranked third in confidence in the Asia- Pacific region after Singaporeans (92.1) and Malaysians (91.3).

The survey also found dramatic surges in overall consumer confidence in Hong Kong, from 51.5 to 85.1, India, from 44.5 to 70.1, and New Zealand, from 59.3 to 65.7.

"The exuberance exhibited by consumers in many markets in the region is noteworthy. Businesses are just recovering from the regional downturn, but it's interesting that consumer sentiment has bounced back so quickly and so robustly," the survey concluded.

MasterCard International's debit cards Maestro/Cirrus are used by eight million consumers in Indonesia, while its credit cards are used by approximately one million people. (cst)