Continued PPKM Leads to Decline in Consumer Confidence Regarding Economic Conditions in August 2021

Consumer confidence in economic conditions continues to decline as the implementation of Community Activity Restrictions (PPKM) continues. This can be seen from the Consumer Confidence Index (IKK), which decreased by 2.9 points from 80.2 in July 2021 to 77.3 in August 2021.

The decline in the IKK is due to the weakening perception of consumers towards the current economic conditions. This is reflected in the Current Economic Conditions Index (IKE), which decreased from 67.1 in July 2021 to 59.4.

Bank Indonesia (BI) explained that the weakening of the current IKE is caused by the continuation of PPKM Levels 3 and 4 in various regions of Indonesia, thus impacting the activities and income of the people. The decline in IKE occurred across all components, namely the Current Income Index by 10.7 points, the Job Availability Index by 9.8 points, and the purchase of durable goods by 2.9 points.

Meanwhile, the Consumer Expectation Index (IEK) for the next six months strengthened to 95.3 from 93.2 in July 2021. Consumers expect economic expansion to improve in the next six months along with the slowing rate of COVID-19 transmission and increased vaccination. However, the August 2021 IEK is still at a pessimistic level because it is below 100.

Previously, the IKK also experienced a decline when the Emergency PPKM was first implemented in July 2021. At that time, a decrease of 25.3% was recorded from 107.4 in June 2021.