Morning Briefing: Indonesian Consumers Confidence Index Slow Down in January

Consumer Spending -Photo by Mpeace Plaza

JAKARTA (TheInsiderStories) – Good morning! Indonesian Consumers Confidence Index in January recorded at 125.5 points, or decreased from 127 points in December 2018, central bank reported yesterday. Despite its decline, the figure is still considered in optimist level which is above 100 points.

Bank Indonesia noted, the lower of consumers optimism caused by Current Economy Index and Economy Condition Index components that decreased respectively to 110.3 points and 140.6 points. Curtailing consumers optimism to economic condition was caused by lessen consumers expectation on income and labour availability in the next six months.

“The optimism declined because of income increase was not as high as the previous month, and consumers confidence reduction in providing durable goods, especially in electronic goods such as television, computer, cell phone, and else,” said the Bank.

The survey also indicated a decreasing price pressure in the next three months. Price pressure drop estimation will be supported by adequate goods supply and smooth goods distribution. The condition is also projected to continue in the next six months, during Eid Al-Fitr season.

Moreover, the government targeted 490 million tons (MT) of coal production in this year, higher than the initial target at 485 MT. The Ministry of Energy and Mineral Resources explained that the target consists of 380 MT from coal mining work agreement and 100 MT from mining business license.

Last year, Indonesia’s coal production exceeded the target. The coal production realization was 528 MT, while the target was only 485 MT.

But, crude palm oil (CPO) price met a withered condition last year. According to Indonesia Palm Oil Business Association, the average of CPO price was US$595.5 a metric ton during 2018. It fell 17 percent from $714.3/metric ton in 2017.

The price drop was caused by several factors, such as overflowing world’ vegetable oil supply, Unite States – China trade war, and weak purchasing power amid economic slowdown in some export destination countries.

By the price decline, palm oil contribution to Indonesia’s foreign exchange revenues followed decreasing. In 2018, the association predicted that $20.54 billion was given by palm oil industry, slashed by 11 percent compared to 2017.

The Meteorology, Climatology, and Geophysics Agency found eight mega-thrust zones in West Sumatra Province. One of which in the Mentawai Islands District, said head of National Disaster Mitigation Agency Doni MonardoDwikorita in a written statement.

The agency will install 50 Earthquake Early Warning Systems across West Sumatra’s coastline, 15 warning receiver systems, and conduct a socio-cultural approach to educate locals on disaster mitigations

While, Indonesian Rupiah continued gaining its strength by 0.2 percent to 13,947. So was the Jakarta Composite Index that jumped by 1.02 percent to 6547.87 with all sectors blooming. The gain was supported by domestic investors, as there was only Rp138.55 billion foreign buy.

Market was affected by economic growth data release which hits record during President Joko Widodo’ ruling.

May you have a profitable day!

Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia