Jakarta, CNBC Indonesia – One more sign of the sluggishness of the Indonesian economy is visible. It is increasingly being confirmed that Indonesia has entered a period of economic recession.
This sign is consumer confidence. Bank Indonesia (BI) reported the Consumer Confidence Index (IKK) for the September 2020 period of 83.4. Decreased compared to the previous month, namely 86.9.
IKK uses the number 100 as a starting point. If it is still below 100, it means that consumers have a pessimistic perception of facing the current economic ocean and the coming months.
The last time the IKK was above 100 was in March 2020 and in April 2020 it was at its lowest point since 2005. After that the IKK began to improve with increases for three consecutive months. However, in September 2020 the rate of increase stopped, the IKK was corrected again.
The IKK consists of two major sub-indices, namely the Current Economic Condition Index (IKE) and the Consumer Expectation Index (IEK). In September 2020, the CECI was recorded at 54.1, down from the previous month’s 55.6. Still very far below 100.
The CECI is further divided into three sub-indices, namely the Current Income Index, Job Availability and Purchases of Durable Goods. The Current Income Index and Purchases of Durable Goods decreased in September compared to August, while the Job Availability Index edged up slightly. But all three are still far below 100.
“Consumer confidence in current income has weakened compared to the previous six months due to a decrease in routine income (salary / honorarium) and business turnover due to the re-enactment of the Large-Scale Social Restrictions (PSBB) policy in various cities in September 2020. The index decline occurred in all expenditure categories, especially for respondents with an expenditure level of Rp. 1-2 million per month. According to the age category, the largest decrease occurred in the 20-30 year old and 51-50 year old group of respondents, “said the BI report.
With decreased confidence in income, the purchase of durable goods (durable goods) also fell, especially for electronic goods as well as furniture and household furniture. The decline mainly occurred in respondents with expenditures above IDR 5 million per month. By age category, the decline occurred mainly in the 20-50 year group.
Turning to the IEK, consumer confidence in the economic conditions for the next six months is still in the optimistic zone, namely 112.6 in September 2020. However, it is down compared to the previous month which amounted to 118.2.
“Consumers estimate that the expansion of economic conditions in the next six months will still be limited, both in terms of business activities, job availability and increased income. This is indicated by the decline in the Business Activity Expectation Index, Job Availability Expectation Index, and Income Expectation Index for the six next month, “said the BI report.
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