Ardian Wibisono

Workers at the Cilincing overpass site in North Jakarta on Wednesday. Indonesia’s economy is projected to grow from 5 to 5.5 percent next year, depending on the success of the government’s infrastructure development program. (Photo: Yudhi Sukma Wijaya, JG)

Scandals Undermine Faith in Indonesian Government

Consumer confidence rebounded in November but trust in the government fell to a seven-month low as the KPK-Police-AGO saga and the Bank Century scandal dented faith in the nation’s political leadership, according to two surveys by the Danareksa Research Institute released on Wednesday.

After increasing in the previous survey, Danareska’s consumer confidence toward the government index showed public sentiment toward the government fell 3.1 points to 110.7.

The survey was based on a representative sample of 1,700 households across six regions. Index scores above 100 indicate optimism while scores below that level suggest consumers are more doubtful about the government’s performance.

“All of the components that contribute to the index declined,” Danareksa senior economist Purbaya Yudhi Sadewa said. “However the steepest decline was in the confidence in the government to uphold the supremacy of law due to the Bank Century case,” he said.

“It has not had any impact on the economy yet,” Purbaya said. “However, if the problems persist general confidence would decrease in the long run and household consumption might fall due to the increasing uncertainty.”

The CCGI is made up of five components: consumer perceptions of the government’s ability to push economic growth; to maintain price stability; to maintain public infrastructure; to provide security; and to uphold the supremacy of the law.

Purbaya said the decreasing confidence in the government had not affected consumer confidence in the economic outlook as state-owned Danareksa’s consumer confidence index bounced back in November after dropping for two consecutive months. The CCI added 1.2 points to 88.4 in November on easing concerns about job scarcity.

“Only 33.1 percent of consumers cited job scarcity as a pressing issue compared with 37.5 percent in October,” Danareksa said in a statement. “It is this issue, as well as perennial concerns over the prices of basic foodstuffs, that have been instrumental in shaping consumer perceptions toward the state of the local economy over the last three months.”

Consumer buying intentions also rose in November, more than recouping October’s decline. The proportion of consumers planning to buy durable goods over the next six months jumped to 29 percent in November, from 22.7 percent in October.

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