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Consumer Confidence Dipped in May, BI Says
Dion Bisara | June 08, 2010

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Bank Indonesia’s Consumer Confidence Index dropped slightly in May but is still showing optimism, although there is growing concern about rising prices and diminishing savings.

The CCI, released on Tuesday, fell by 0.8 points from April to 109.9, after steadily increasing over the last three months. A reading of more than 100 indicates optimism about the economy.

The monthly index is based on interviews with 4,600 households in 18 cities across the country, and has a 2 percent margin of error.

“Price pressures in the next three months are expected to increase as indicated by the rise in the Price Expectation Index, which rose from 158.6 in April 164.3 points, which is the highest point in for last 19 months,” the central bank said in a report.

The Islamic fasting month of Ramadan in August and the Idul Fitri holiday in September were major concerns for consumers, Bank Indonesia said. Consumers are mainly worried about rising prices for clothing, transportation, and recreation, it said.

The Price Expectation Index, a component of the CCI, measures where respondents see prices heading.

“Respondents are optimistic that their income in the next six months will improve, although the optimism is not as high as a month before,” Bank Indonesia said, adding that consumers also expected to save less money in the next six months.

The central bank said the Current Economic Condition Index, another component of the CCI, rose to 100 in May, up 0.4 points from April, because of a belief by respondents that job availability was improving.