Recovery Challenges, Bank Indonesia Indicate Decreasing Consumer Confidence

Bank Indonesia Building. (Angga Nugraha / VOI)

JAKARTA - Head of the Communication Department of Bank Indonesia (BI) Erwin Haryono gave a signal that the economic recovery condition in early 2021 was still under pressure as a result of the COVID-19 pandemic.

"The Bank Indonesia Consumer Survey indicates consumer confidence in economic conditions will be stuck in January 2021," he said in an official statement, Monday, February 8.

Erwin added, on a month to month basis, the Consumer Confidence Index (IKK) throughout the past month was recorded to be weak compared to the period in December 2020.

"From the survey results we found the fact that the Consumer Confidence Index (IKK) for January 2021 was 84.9, lower than the achievement in December 2020 of 96.5," he said.

Furthermore, he explained that the restrained consumer confidence in January 2021 was mainly due to lower consumer expectations of economic conditions in the next 6 months.

"This development is due to estimates of the expansion of business activities, availability of jobs and future income, which are not as strong as in the previous month," he added.

Nevertheless, the central bank sees that consumer expectations for future economic conditions are maintained and at an optimistic level (index> 100). This optimistic consumer expectation is expected to improve in the future, thus supporting improvement in consumer confidence.

For information, the restrained improvement in consumer confidence in January 2021 occurred in all categories of expenditure levels and the majority of age groups.

"Spatially, consumer confidence decreased in the 14 cities covered by the survey, with the largest decrease in Surabaya, followed by Bandung and Mataram," concluded Erwin.