diagram (Doc.MI)
BANK Indonesia (BI) reported that the Consumer Confidence Index (IKK) for November 2024 was recorded to have increased, namely 125.9 from the previous position of 121.1.This increase occurred a month after the inauguration of prabowo Subianto as President of the Republic of Indonesia.
“The Bank indonesia Consumer Survey in November 2024 showed that consumer confidence in economic conditions had increased compared to the previous month,” saeid BI Ramdan Denny Prakoso, Head of the Communications Department, on Monday (9/12).
the central bank noted that the increase in consumer confidence in november 2024 stems from strengthening consumer confidence in current and future economic conditions.
Based on expenditure categories, an increase in consumer confidence was recorded in November 2024 for all categories.The highest increase in IKK was recorded in respondents with expenditure > IDR 5 million.
The Current Economic Conditions Index (IKE) and the Consumer Expectations Index (IEK) for November 2024 were recorded at 113.5 and 138.3 respectively, higher than the previous month’s indices recorded at 109.9 and 132.4.
the strengthening of the IKE in November 2024 was driven by the Current Income Index, Job Availability Index, and Durable Goods Purchase Index (HARD GOODS), respectively increased from 117.9, 104.7, and 107.0 to 121.9, 110.1,and 108.4.
Meanwhile,consumer expectations regarding economic conditions over the next six months are expected to increase,which is reflected in the increase in IEK,which is driven by the strengthening of all it’s components,namely expectations regarding income,job availability and business activities,from 138.4, 129.5, respectively and 129.2 to 141.7, 136.8,and 136.2.(D-3)
How does an increase in consumer confidence possibly affect investment opportunities in Indonesia?
Interview: Analyzing Indonesia’s Rising Consumer Confidence Index
Time.news Editor: Welcome, Dr. Ramdan Denny Prakoso,Head of the Communications Department at Bank Indonesia. Thank you for joining us today to discuss the recent increase in the Consumer Confidence Index (IKK). Can you start by explaining the importance of the IKK and its recent rise to 125.9 in November 2024?
Dr. Ramdan Denny Prakoso: Thank you for having me.The Consumer confidence Index is a key indicator reflecting consumers’ overall feelings about the economic situation and their financial prospects. an increase from 121.1 to 125.9 indicates a ample shift in consumer sentiment, particularly following the inauguration of President prabowo Subianto. This boost suggests that consumers are feeling more optimistic about current and future economic conditions.
Time.news Editor: Interesting! What do you think has caused this surge in consumer confidence in Indonesia?
Dr. Ramdan Denny Prakoso: The rise can be attributed to stronger assessments of both current and future economic conditions.For instance,the current Economic Conditions Index (IKE) rose significantly from 109.9 to 113.5, with improved indices in job availability and income perception. The anticipation of economic stability and growth under the new leadership has certainly played a role in enhancing consumer outlook.
time.news Editor: That’s very telling. Could you elaborate on the expenditure categories? Why do you think there was a noteworthy increase for respondents spending over IDR 5 million?
Dr. Ramdan Denny Prakoso: Certainly. The data shows that consumers with higher spending capacities generally reflect more robust confidence, likely due to their greater economic security. This demographic’s increased confidence may also signal improved business conditions and expectations for the luxury market. An affluent consumer base tends to drive economic growth, particularly in urban areas.
Time.news Editor: The Current Income Index, Job Availability Index, and Durable Goods Purchase Index also saw increases. How do you foresee these trends impacting businesses in indonesia?
Dr.Ramdan Denny Prakoso: These indices are crucial as they indicate that consumers are more willing to spend, which bodes well for businesses, especially in sectors related to durable goods and services. Companies may want to leverage this confidence by enhancing marketing strategies and optimizing their stock in anticipation of increased demand. Continuous engagement with consumers, like promotions or loyalty programs, could capitalize on this optimism.
Time.news Editor: What implications does this improved outlook have for investment in Indonesia? should potential investors be optimistic?
Dr. Ramdan Denny Prakoso: Absolutely.An increase in consumer confidence can act as a catalyst for more viable investment opportunities. Investors typically look for stable economic conditions before committing capital. With rising consumer expectations over the next six months—evident from the Consumer Expectations Index (IEK) reaching 138.3—this signals a promising environment for investment. Sectors like retail,hospitality,and technology may see notable growth as consumer spending rises.
Time.news Editor: What practical advice would you offer to individuals and businesses looking to navigate this dynamic economic landscape?
Dr. Ramdan Denny Prakoso: For individuals, it’s an opportune time to consider investments in savings or asset markets as consumer confidence translates into economic growth. For businesses, adapting strategies to align with consumer sentiment is key. Engaging with customers through timely promotions, improving product offerings, and enhancing customer experience will prove beneficial.
time.news Editor: Thank you,dr. Prakoso, for your insightful analysis on the increased Consumer Confidence Index in Indonesia. Your perspective is invaluable as we navigate these changing economic conditions.
Dr. Ramdan Denny Prakoso: Thank you for having me. It’s essential to keep monitoring these trends, as they provide us with a clearer picture of the economic trajectory moving forward.
