Bank Indonesia (BI) reported the Consumer Confidence Index (CCI) on economic conditions dropped to 84.9 in January 2021 from a prior month a 96.5 - Photo: Privacy

JAKARTA (TheInsiderStories) – Bank Indonesia (BI) reported the Consumer Confidence Index (CCI) on economic conditions dropped to 84.9 in January 2021 from a prior month a 96.5. While the Retail Sales Index (RSI) grew positive to 4.8 percent in December 2020 from November minus 1.2 percent.

The central bank noted, restrained improvement in consumer confidence mainly due to lower consumer expectations of economic conditions in the next six months. This development is due to estimates that the expansion of business activities, job availability and future income is not as strong as in the previous month.

Despite this, consumer expectations of future economic conditions remain at an optimistic level. In addition, the restrained improvement in consumer confidence in occurred in all categories of expenditure levels and the majority of age groups. Spatially, consumer confidence decreased in the 14 cities covered by the survey, with the largest decrease in Surabaya, followed by Bandung and Mataram.

BI also acknowledge, the retail sales performance was limited in December 2020. On a monthly basis, retail sales increased in most commodity groups, driven by increased demand for the Christmas and New Year celebrations.

The highest increase in retail sales occurred in the other household appliances and information equipment group and communication. The rising demand was not as high as the same period in the previous year an in annual basis, the retail sales performance for December contracted with an retail sales index at minus 19.2 percent, deeper than minus 16.3 percent in the previous month, mainly from the food, beverage and tobacco group also the clothing sub-group.

In January, retail sales is predicted to remain stable with annual growth is estimating to improve, although on a monthly basis it decreased. On a monthly basis, the retail sales index for January 2021 is projected to decline by minus 1.8 percent on monthly basis followed with the seasonal factor of decreased public demand after the national religious holidays, amid the implementation of community activity restrictions in Java and Bali, as well as weather factors and natural disasters that occurred in a number of areas.

The Bank said, all groups experienced a decline in monthly retail sales performance, with the largest decrease in the motor vehicle fuels group. And, on an annual basis, retail sales is estimated to improve in January with a smaller contraction in real sales index growth, from minus 19.2 percent in the preceding month to minus 14.2 percent.

“There were indications of improvement in annual sales in most groups, especially the Clothing sub-group, the Food, Beverage and Tobacco group and the Other Household Supplies group,” wrote the report.

In terms of prices, inflationary pressure is predicted to be relatively stable in the next three months and in the next six months until June 2021 it will increase. The General Price Expectation Index (GPEI) for the next three months was 149.7, relatively stable compared to 150.4 in the previous month, in line with maintained supply.

In addition, GPEI for the next six months amounted to 164.8, higher than the previous month’s 161.7, influenced by expectations of reduced availability of goods or services and possible distribution disruptions.

Written by Editorial Staff, Email: theinsiderstories@gmail.com