Indonesian Consumer Confidence, October 2014

Taken from The ANZ-Roy Morgan 

ANZ-Roy Morgan Indonesian Consumer Confidence Dips on Politics in October

HIGHLIGHTS

• ANZ-Roy Morgan Indonesian Consumer Confidence fell to 158.1 (down 3.1pts) in October, but still 9.1pts higher than it was a year ago in October 2013 (149.0). The main driver of this month’s decrease was less confidence in the economic outlook over the short and long term.
• Indonesians are less optimistic about economic prospects for the country as a whole. 82.8% (down 4.5ppts) of Indonesians expect Indonesia will have ‘good times’ financially during the next 12 months and 16.1% (up 3.6ppts) said Indonesia will have have ‘bad times’ financially.
• 92.1% of Indonesians (down 2.4ppts) expect the country as a whole to have ‘good times’ economically over the next five years compared to 6.8% (up 1.6ppt) who expect ‘bad times’ economically.
• In terms of personal finances, 47% (unchanged) of Indonesians said their families are ‘better off’ financially now compared to a year ago with 8% (unchanged) who said their families are ‘worse off’ financially.
• Also, 74% (unchanged) of Indonesians expect their families will be ‘better off’ financially this time next year compared to 2% (down 1ppt) who expect their families to be ‘worse off’ financially.
• Finally, 62% (down 2ppts) of Indonesians said ‘now is a good time to buy’ major household items compared to 35% (up 3ppt) who said ‘now is a bad time to buy’ major household items.

ANZ Chief Economist South Asia, ASEAN & Pacific, Glenn Maguire said:

• "Political shenanigans and the growing prospect of a near term fuel-price hike are now weighing on the minds of hitherto exuberant Indonesian consumers.
• "Our survey was largely conducted over the period when Prabowo made a clean sweep of lower and upper house parliamentary appointments and hopes of Jokowi securing a workable majority in the Parliament were perhaps at their lowest. To be sure, some of the decline in confidence aligned with political developments was probably tempered by a well-received response to his official Cabinet announcement.
• "The large decline in question Economic conditions next year, falling 8.1ppts in the month, suggests the prospects of a fuel price hike is also weighing on confidence. A fuel price hike will surely make a significant dent in sentiment. Indeed, the history of our consumer confidence index data set provides a useful indication of what the likely impact of a fuel price hike will be on the Indonesian economy. We note that consumer confidence took a sizeable hit in June-July 2013 after a 44% rise in retail fuel prices – the first increase in five years.
• "Given a fuel price hike is imminent, Consumer Confidence looks set to fall in tandem with rising petrol prices. Our consumer confidence index should be providing the timeliest read of any economic data in Indonesia on how the impact will play out and their likely effect on economic activity and financial markets.”