Novia D. Rulistia, Jakarta – A survey of Asia-Pacific countries carried out on the Internet reveals 77 percent of the respondents believe Indonesia is in a recession, despite first-quarter economic growth.
Catherine Eddy, executive director of PT ACNielson Indonesia, the company that carried out the survey, said Friday rising fuel and food prices were the main cause for the gloomy outlooks.
"This is I think worse than what happened in 2005 when the government also increased the fuel prices. This time is like a double hit," she said.
South Korea and Thailand had the highest level of pessimists, with 81 percent of the respondents from each country saying they were experiencing recessions.
The survey was conducted between mid April and early May and surveyed 532 consumers in Indonesia who have internet access and monthly incomes of at least Rp 3.5 million. The survey queried a total of 7,637 consumers throughout Asia Pacific.
In the first quarter of this year, Indonesia's economy grew by 2 percent, while in the fourth quarter of last year, it fell 2.15 percent.
The government has revised its 2008 economy growth prediction to a maximum of 6.4 percent from previously 6.8 percent due to surging global oil prices and an adverse global economy. The government also reduced energy subsidies by raising fuel prices by an average 28.7 percent on May 24.
Eddy predicts that in the second half of this year, the country will suffer an economic slowdown as industries and individuals will cut spending. "Some people have started to buy cheaper brands, and even have reduced the quantity of their usage. Some even have stopped spending," she said.
Expensive brands will benefit most from the situation, while middle-range brands will suffer the most, she said. "The lower brands will win," she said.
The survey covered some of the other concerns Indonesia will face over the next six months.
It shows that of 13 issues, balancing work and leisure is the biggest concern, with 38 percent of the votes. In second place was concern for the economy with 37 percent, followed by parents' welfare and happiness with 27 percent, children's education and/or welfare with 22 percent, health with 20 percent and job security with 12 percent.
The survey also shows what consumers do with cash left over after essential living expenses have been paid, with 61 percent of the respondents saying they put their money into savings, followed by investment in shares with 51 percent and spending on holidays and paying off debts both with 30 percent.