Consumer Confidence in the Economy Remains Optimistic in November 2022, Despite Weakening

Bank Indonesia (BI) reports a decline in consumer optimism regarding current economic conditions compared to the previous month. This is reflected in the Current Economic Index (IKE) for November 2022, which stood at 119.1, lower than the previous month's 120.3.

Nevertheless, BI states that consumer confidence in the economic conditions remains strong as it remains in the optimistic range (>100).

The sustained consumer optimism in November 2022 was supported by the continued strength of both the Consumer Expectation Index (IEK) and the Current Economic Conditions Index (IKE). Future consumer expectations remain strong, primarily driven by expectations of income and job availability.

Meanwhile, the IKE remained in the optimistic range, although slightly decreased, in line with the decline in the current income index, job availability, and purchases of durable goods.

According to Antara, sustained consumer confidence is particularly indicated among respondents with spending above Rp5 million. Based on age, the strong November 2022 Consumer Confidence Index (IKK) was primarily supported by respondents aged 20-30 years.

Spatially, the IKK decreased in some surveyed cities, most significantly in Banjarmasin (-8.8 points), followed by Surabaya (-7.1 points) and Manado (-6.8 points). Meanwhile, several cities still recorded an increase in the IKK, highest in Makassar (14.1 points), followed by Padang (5.6 points), and Bandar Lampung (5.3 points).

Furthermore, the average proportion of consumer income allocated to consumption showed a slight decrease, indicated by an average propensity to consume ratio of 74.7 percent, down from 75 percent.

The average debt-to-income ratio was recorded at 9.6 percent, a slight increase compared to the previous month. On the other hand, the saving-to-income ratio remained relatively stable in November 2022 at 15.7 percent.