JAKARTA (ANN/THE JAKARTA POST) – Indonesian consumers have continued to grow more anxious as job prospects dim and rising living costs strain household budgets, dragging confidence to its lowest level since October last year.
The Bank Indonesia (BI) monthly survey released on Tuesday revealed that consumer confidence continued its downward trend in March, falling for the third consecutive month.
The consumer confidence index (CCI) dropped by 5.3 points to 121.1, following February’s reading of 126.4.
In a press statement published together with the survey, BI spokesperson Ramdan Denny Prakoso said that the decline reflected growing pessimism over both current economic conditions and future expectations.
The two main components of the index: The current economic index and the economic outlook index also fell to 110.6 and 131.7 in March, respectively.
The drop was broad-based, with all six sub-components weakening, reflecting deeper unease about both current conditions and future expectations.
The sharpest decline came from perceptions of job availability, which plunged 8.3 points to 125.9. Views on job conditions compared with six months ago dropped to near-neutral territory, falling 5.9 points to 100.3.
The sustained drop in consumer sentiment also coincided with over 90,000 layoffs since 2024 and sluggish consumer spending in the first quarter, particularly among the urban middle class.
“Looking forward, the persistent erosion in consumer sentiment poses a significant risk to domestic demand, particularly consumption, which remains a key engine of GDP growth,” said Fithra Faisal, senior economist of Samuel Sekuritas Indonesia (SSI) Research, on Tuesday.
He warned that the steady erosion in confidence could pose a risk to the country’s sub-5 per cent gross domestic product (GDP) growth forecast for 2025.
The pressure is especially acute among the urban middle class, where layoffs and cost-of-living pressures have been piling up. The sustained drop in sentiment coincided with over 90,000 layoffs since 2024 and sluggish consumer spending in the first quarter.
Expectations for household income over the next six months also slipped 6.3 points to 137.0, but current income expectations saw a modest 1.4-point uptick, likely tied to seasonal bonuses or minimum wage adjustments.
“With inflation still modest but the rupiah under pressure and real wages stagnating, the drag on discretionary spending may intensify, particularly among the vulnerable middle-income group,” Fithra noted.
Weakening sentiment could prompt a shift in household behavior toward precautionary savings, he continued, further suppressing retail and services activity.
Headline inflation hovered at just 1.03 per cent year-on-year in March, while the monthly rate jumped 1.65 per cent.
It was the third month in a row that the annual consumer price index has come in below the central bank’s inflation target range of 1.5 to 3.5 per cent.
The rupiah tumbled to a multi-year low last week, briefly hitting IDR17,217 per dollar before rebounding to around IDR16,800, shortly after fresh trade tensions sparked by United States President Donald Trump’s sweeping tariff plans.
On March 25, the currency also touched IDR16,642 against the greenback, its weakest level since the 1998 Asian Financial Crisis.
