Consumer Confidence Soars in May 2023, Bolstering Economic Outlook

traditional market in Indonesia (photo: Alex Hudson - Unsplash)

Bank Indonesia (BI) has released its latest Consumer Survey, revealing that consumer confidence in May 2023 has experienced a notable boost compared to the previous month. The Consumer Confidence Index (CCI) for May 2023 stands at a robust level of 128.3, indicating an improvement from the reading of 126.1 recorded in April 2023.

According to Erwin Haryono, the Head of BI’s Communication Department, the survey findings suggest an overall increase in consumer confidence regarding the economic outlook compared to the preceding month.

Haryono stated, “The strengthening of consumer confidence in May 2023 is driven by the positive trajectory of both the Current Economic Conditions Index (CECI) and the Consumer Expectations Index (CEI).”

Further analysis reveals that the CECI has displayed an upward trend across all its constituent components, with significant improvements observed in the Job Availability Index and the Durable Goods Purchasing Index. Similarly, the CEI has also witnessed a notable increase, primarily attributable to a rise in the Business Activity Expectations Index.

Notably, consumer expectations for the economic conditions in the next six months have exhibited a positive trend, as evidenced by the May 2023 CEI reading of 137.8, surpassing the April 2023 figure of 135.5. This upward trajectory is chiefly supported by heightened expectations surrounding business activities and job availability.

Furthermore, the survey findings indicate that consumer confidence remains robust across all expenditure categories in May 2023. Of particular interest is the increase in optimism observed among respondents with expenditures ranging from Rp 4.1 to 5 million. Although there has been a slight decline in confidence among the 20-30-year-old age group, consumer sentiment remains optimistic across all other age categories.

The CCI index has exhibited an overall upward trend throughout 2023, with the exception of a minor decline recorded in February (122.4) following a reading of 123.0 in January.

These survey results underscore the positive trajectory of consumer confidence in May 2023, reflecting improved sentiment towards the economic landscape. As consumer expectations continue to rise, this bodes well for economic growth and stability in the coming months. Bank Indonesia will closely monitor these trends and adjust its policies accordingly to support the evolving consumer sentiment and overall economic development.