JAKARTA (TheInsiderStroies) – Indonesia’ consumer confidence index (CCI) dropped to 121.7 in January from 126.4 in December 2019, the central bank reported today (02/06). Nevertheless, Bank Indonesia (BI) still confidence the consumer optimism occurs in all expenditure groups will improve in the future.
The weakening of consumer optimism, according to BI, was caused by the decline in the index of current economic conditions by 3.5 points to 109.6 from the previous month and the index of expectations of economic conditions weakening 5.9 points to 133.7.
According to central bank, the CCI occurred in all categories of respondents’ expenditure and respondents’ age categories. Consumer perceptions weakened due to declining consumer confidence in the availability of employment today compared to six months ago. Moreover, consumer confidence in durable goods also contracted from 117.5 to 113.7 on electronic goods and household furniture.
Then, optimism about the availability of jobs was observed to be weak as indicated by the availability of employment in January which fell from 101.1 to 97.6. Consumers estimate that job availability in the future will not be as high as the previous month, reflected in the index of job availability expectations recorded at the level of 120.0, or down 7.1 compared to last month.
Along with the weakening of the other components of optimism, consumer confidence in current income declined 3.2 points from December at 117.5. Under these conditions, consumers expect consumption spending in the next three months to increase from the previous month, indicated by forecasts for household consumption through April which is expected to advance from 160.9 to 162.6.
Perceptions of current economic conditions and expectations of future economic conditions remain favorable underpin consumer optimism. Consumers view positively the current economic conditions, especially from the condition of income and purchases of durable goods.
In addition, consumers continue to have positive expectations regarding income, availability of employment, and business activities in the next six months. Consumers are forecasting an upward pressure on price increases in the next 12 months (January 2021).
This is indicated by the 12-month Price Expectation Index that will increase compared to the index in the previous month. The increase in price pressures is influenced by higher demand for the next year
On the supply side, economic growth is expected to be supported by the industrial sector which will increase between 5.0 – 5.5 percent. While the unemployment rate is expected to fall to 4.8 – 5.0 percent, accompanied by a reduction in the poverty rate in the range of 8.5 – 9.0 percent.
To achieve that target, coordinating minister for economic affairs, Airlangga Hartarto, said the government had mapped out strategies and priority steps to be taken to face economic challenges in 2020, both internally and externally. First, the government will increase economic growth through structural transformation to strengthen domestic demand and international trade performance.
Second, maintaining macroeconomic stability by positioning domestic prices and the exchange rate at a stable and competitive level. Third, increase inclusiveness and a sustainable economy.
“Increasing competitiveness is also one thing that is the focus of attention. Sustainable economic growth is also needed to get out of the poverty line and encourage human development,” Hartarto said.
Regarding investment, the government will optimize the online single submission system, increase the effectiveness of the investment acceleration task force, relax the negative investment list, and approve investment priority sectors, Hartarto noted.
In addition, the implementation of the tax holiday and super deduction tax and the development of the national strategic project, special economic zones, and industrial estates are also the mainstay policies. The government is also preparing the omnibus law, aims to further simplify the licensing process, the minister said.
Written by Staff Editor, Email: email@example.com