Jakarta – Indonesian consumer confidence rose slightly in January, helped by expectations of easing inflation in Southeast Asia's biggest economy after a series of cuts in subsidised fuel prices, two surveys showed.

Indonesia's annual inflation in January eased to 9.17 percent from 11.06 percent in December, lower than expectations, and the lowest rate since April last year when it reached 8.96 percent.

The government has cut subsidised fuel price three times in the last two months, bringing the price of subsidised gasoline down by 25 percent in total and diesel by 18 percent.

"Consumers take the view that inflationary pressures will abate in the six months ahead," the state-owned Danareksa Research Institute said in a survey.

The central bank said in a report early this week that the annual inflation rate was expected to continue easing until the first half of 2010 amid slower domestic demand.

Bank Indonesia's survey of 4,600 households in 18 cities across Indonesia, released on its website (www.bi.go.id) released on Wednesday, showed that the consumer confidence index rose slightly to 92.8 in January from a reading of 90.6 in December.

A separate survey by Danareksa Research Institute also showed improving sentiment, with the index rising to 80.8 in January after tumbling to 78.6 in December last year.

For both surveys, a reading of below 100 still means more consumers are pessimistic than optimistic. The last time the index was above 100 was in November 2007 for the central bank survey, and in February 2005 for the Danareksa survey.

The central bank has cut its key interest rate three times since December, bringing rates down by a total of 125 basis points to 8.25 in January and has indicated it may cut rates again in a bid to support growth.

The government has proposed a stimulus package worth 71.3 trillion rupiah ($6.05 billion) including tax incentives for companies and individuals, cuts in fuel and electricity prices, and infrastructure spending to sustain growth.