Despite the Omicron Variant, Indonesian Consumer Optimism Strengthens in Early 2022

Despite a wave of infections from the Omicron variant of Covid-19, Indonesian consumer optimism strengthened at the beginning of 2022.

This is evident from the Bank Indonesia (BI) survey, which shows that the Consumer Confidence Index (CCI) increased by 1.3 points from 118.3 in December 2021 to 119.6 in January 2022.

An index above 100 indicates optimistic consumer sentiment. Conversely, an index below 100 indicates pessimistic consumer sentiment.

The increase in consumer confidence in January 2022 was most significant among respondents with incomes between Rp3.1 million and Rp4 million, with the index rising by 4.1 points to 122.1. This increase in optimism was also observed among respondents from almost all age groups.

Regionally, consumer confidence in January 2022 increased in the 13 cities covered by the survey. The highest increases were observed in Banten (22.3 points), Pontianak (16.2 points), and Makassar (13.9 points).

Economic Conditions Index and Consumer Expectations Also Rose

According to BI, the increase in the CCI in January 2022 was driven by an improvement in the Economic Conditions Index (ECI), or consumer perception of current economic conditions.

According to the BI survey, the ECI rose from a pessimistic level of 99.9 in December 2021 to an optimistic level of 100.9 in January 2022. This increase was driven by the current income index, which grew by 2.3 points to 111.9, and the durable goods purchase index, which increased by 2.4 points to 94.3.

This is further supported by the increase in the Consumer Expectations Index (CEI), or consumer confidence for the next 6 months regarding income, overall Indonesian economic conditions, and job availability.

BI noted that the CEI in January 2022 rose to 138.3, higher than in December 2021. The increase was supported by all components of the CEI: the income expectation index grew to 139.6, the job availability expectation index grew to 134.8, and the business activity expectation index increased to 140.4.

(Also read: 5 Top Global Concerns for the Future)