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Consumer Confidence Continues To Point To Solid Consumption

INDONESIA
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March consumer confidence rose 0.6% m/m to 123.8, less than a point below the 12 month average. It has been fairly stable for the last 18 months and continues to point to solid private consumption growth, which was at 4.5% y/y in Q4. Bank Indonesia (BI) said at its March meeting that household expenditure is one of the drivers of “solid” national growth.

  • USDIDR has weakened significantly to above 16100 prompting BI to intervene again in the FX market today. However, the JP Morgan NEER is 1% higher this year, which should keep downward pressure on import prices and support consumption. While import prices are not as low as they were in mid-2023 (July -11.4% y/y), they still fell 1.7% y/y in February.
  • Q1 national accounts are released on May 6, which should give a more complete picture of domestic demand. The next BI meeting is on April 24 though and its assessment of consumption is unlikely to change before the Q1 data prints.
Indonesia consumption y/y% vs consumer confidence

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March consumer confidence rose 0.6% m/m to 123.8, less than a point below the 12 month average. It has been fairly stable for the last 18 months and continues to point to solid private consumption growth, which was at 4.5% y/y in Q4. Bank Indonesia (BI) said at its March meeting that household expenditure is one of the drivers of “solid” national growth.

  • USDIDR has weakened significantly to above 16100 prompting BI to intervene again in the FX market today. However, the JP Morgan NEER is 1% higher this year, which should keep downward pressure on import prices and support consumption. While import prices are not as low as they were in mid-2023 (July -11.4% y/y), they still fell 1.7% y/y in February.
  • Q1 national accounts are released on May 6, which should give a more complete picture of domestic demand. The next BI meeting is on April 24 though and its assessment of consumption is unlikely to change before the Q1 data prints.
Indonesia consumption y/y% vs consumer confidence

Keep reading...Show less