With PPKM Relaxed, Consumer Confidence Rises in September 2021

Bank Indonesia (BI) reports that consumer optimism regarding economic conditions has increased in line with the relaxation of Community Activity Restrictions (PPKM) in various regions. This is evident from the Consumer Confidence Index (IKK), which recorded 95.5 points in September 2021, a rise of 18.2 points compared to the previous month's 77.3 points.

This increase in the IKK was primarily driven by rising consumer expectations regarding future economic conditions. This is reflected in the Consumer Expectation Index (IEK), which increased from 95.3 points the previous month to 118.2 in September 2021.

Consumers anticipate that economic conditions in the next six months will improve, along with the decreasing spread of Covid-19 cases. This is particularly due to the increasing vaccination rates aimed at achieving herd immunity and the expansion of relaxations on public mobility.

All components of the IEK increased in September 2021 and are at an optimistic level (>100). Specifically, the Income Expectation Index and the Business Activity Expectation Index recorded 122.8 and 117.4 points respectively, while the Job Availability Expectation Index for the next 6 months recorded 114.4 points.

In line with this, the Current Economic Conditions Index (IKE) also increased in September 2021. The IKE rose from 59.4 points in August 2021 to 72.7 points.

BI explains that this increase in the IKE is consistent with the relaxation of PPKM policies in various regions of Indonesia, which has driven improvements in economic activity and public income. The increase in the IKE occurred across all components: the Current Income Index (13.3 points), the Job Availability Index (21 points), and Durable Goods Purchases (5.8 points).