Urip Hudiono, Jakarta – Rising prices and uncertain job prospects are still dampening the confidence of Indonesia's consumers, although there are hopes of clearer skies ahead, the latest surveys show.
In a Bank Indonesia consumer confidence survey, the overall consumer confidence index for August rose for the third straight month by 1.7 to 98, signaling that more consumers expect the current conditions as regards prices, jobs and incomes, and their ability to purchase durable goods to eventually improve.
By contrast, a separate survey by the Danareksa Research Institute (DRI), shows that most consumers are still wary of the current economic situation and beyond, with last month's overall consumer confidence index dipping by 2 percent to 84.5.
Both monthly indices are still below the minimum 100-point level that signals optimism on the economy.
The central bank's survey, which was conducted on 4,650 households in 18 major cities, showed that consumers on average felt they were better off now in terms of incomes and jobs than six months ago, and will continue to do so at least until the end of the year.
Most consumers saw the prices of goods and services creeping up over the next six months, with the highest inflationary pressures occurring within the next three months up until the year's end.
This, along with expectations of better incomes and job prospects, has left consumers slightly more confident that they will be able to save more – also as a result of higher deposit rates – and buy more durable goods, such as cars and household goods.
The expectation index component of the BI survey – which gauges consumer perceptions of the future – increased 2.4 points to 109.6, higher than increase of 1 point (to 86.5) in the present situations index.
Meanwhile, DRI's survey, conducted on 1,700 households in six main areas in the country, showed that consumer confidence in August weakened – after rising in July – as a result of recent prices rises.
Both components of the overall index declined, with the present situations index falling by 1.4 percent to 65.4, and the expectations index by 2.4 percent to 98.9.
"Our latest survey shows that consumers are more worried by inflation, reflecting fears that food prices will surge during the upcoming fasting month of Ramadhan," said DRI head Purbaya Yudhi Sadewa.
"There is a high probability that prices will indeed trend higher on a more sustained basis for the rest of this year."
On-year inflation rose to 6.51 percent last month from 6.06 percent in July, the Central Statistics Agency (BPS) reported earlier this month.
Purbaya said that traders during Ramadhan – which starts Sept. 13 – usually take advantage of increased demand to up prices, although after the Idul Fitri holidays – which marks the end of Ramadhan – prices historically return to normal levels.
Many consumers were also concerned about their job prospects, which affected their income expectations and spending plans ahead.
"Indeed, jobs are naturally hard to get at this time of the year as companies are reluctant to take on new employees until after the Idul Fitri holidays," Purbaya said.