JAKARTA (TheInsiderStories) - Bank Indonesia (BI) reported the Consumer Confidence Index (CCI) on economic conditions improved to 86.2 in July 2020 from last month at 83.8. Even though it has improved, the consumer confidence is still in the pessimistic zone below 100.
According to the central bank, the strengthening of CCI was driven by improving consumer perceptions of current economic conditions as reflected in the increase in the current Economic Condition Index, which increased from 45.8 to 50.7. Both indicators are improving along with economic activity that has increased again after the easing of large-scale social restrictions in several cities in Indonesia.
This was driven by increases in all of its constituent components, with the highest increase in the Current Income Index of 6.3 points to 53.1. The improvement is also driven by the forecast for relatively stable economic conditions in the next six months. This can be seen from the economic condition expectation index, which amounted to 121.7, although it fell slightly compared to 121.8 in June 2020.
“It is quite stable, slightly decreasing due to limited expectations of income and job availability,” added the central bank in a written statement released today (08/06).
In the same month, respondents’ expectations of job availability in the next six months were still positive, although not as high as the previous month. This is indicated by the job availability expectation index in July, which amounted to 114.5, aka lower than 117.1 in June.
In addition, the CCI was observed to strengthen in all age groups of respondents and almost all categories of expenditure levels. Spatially, the index improved in the 13 cities surveyed by the central bank. The highest increase in consumer confidence was recorded in the city of Mataram in West Nusa Tenggara, followed by Denpasar in Bali, and Pangkal Pinang in Riau.
As reported, Indonesia’ economic growth in the second quarter of 2020 contracted by 5.32 percent compared to last year, a deep decrease compared to the first quarter of 2020 of 2.97 percent. This development is inseparable from the impact of the weakening global economy inline with the COVID-19 outbreak and the decline in domestic economic activity as a result of the restrictions policy.
The decline in domestic economic growth occurred in all components of GDP on the expenditure side. Household consumption experienced a contraction of 5.51 percent, much lower than the performance in the first quarter of 2020 of 2.83 percent.
Investment contracted by 8.61 percent or down from 1.70 percent in the previous quarter. The stimulus consistent with the seasonal pattern was not yet strong and also affected the government consumption, which recorded a contraction of 6.90 percent, down sharply compared to the previous quarter’ growth of 3.75 percent.
In addition, export performance also contracted 11.66 percent due to the weakening global economy and falling world commodity prices. Inline with the contraction in domestic and export demand, import performance also contracted by 16.96 percent.
Written by Editorial Staff, Email: theinsiderstories@gmail.com
