Indonesian consumers have been showing more willingness to spend now instead of saving for a rainy day. (Antara Photo/R. Rekotomo)
Future Is Bright: Indonesian Consumers Show Heightened Optimism in November
BY :TRIYAN PANGASTUTI
DECEMBER 06, 2019
Jakarta. Indonesian consumers were more optimistic last month, showing positive expectations of higher future income, job availability and better economic prospects, Bank Indonesia said in a statement on Thursday.
The central bank's consumer confidence index rose to 124.2 in November from 118.4 a month earlier. A reading above 100 reflects optimism. The index gauges consumers' willingness to spend.
In Indonesia, household consumption accounts for more than half of the economy.
Consumer perception of current economic conditions – one of two broad measures that construct the index – rose by 4.5 points from the previous month to 109, driven by optimism on employment availability, current income and purchases of durable goods.
"Consumer perception on job availability had improved [following] the government recruitment of 152,000 civil servants at the beginning of November," Bank Indonesia spokesman Onny Widjanarko said.
Current income perception also improved substantially, especially among Indonesians who earn between Rp 2.1 million and Rp 3 million ($150-$213) per month or upwards of Rp 4 million.
More consumers also chose to spend their hard-earned cash on buying durable goods including electronics and smartphones, reflecting their willingness to spend now instead of saving for a rainy day.
The trend is consistent with a corresponding increase in consumer expectation – the other broad measure for consumer confidence. The consumer expectation index had risen by 7.1 points to 139.1 in November since the previous month.
These are indications that consumers are more optimistic about future economic conditions, at least in business activities, employment availability and income in the next six months.
According to the central bank, consumers expect improved economic growth and price stability. They also expect more jobs will be available in the next six months. This is reflected in an improved work availability index, up 7.8 points to 126.7 from October's.
The improvement in job prospect was detected at all levels of education, especially among those with postgraduate degrees.