Indonesia the biggest archipelagic state in the world is recently famous for its stable high GDP growth rate, many experts believe that domestic consumption was the cause of Indonesia's economy to survive and grow in the midst of the crisis that hit the developed countries in the world. In our country, consumption accounted for more than 50% of GDP and that is why consumption has a vital role in our country’s economy.
Consumer Confidence is an economic indicator which measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation. How confident people feel about stability of their incomes determines their spending activity and therefore serves as one of the key indicators for the overall shape of the economy. Consumer's Confidence is measured by the Consumer Confidence Index, which, in Indonesia, is tabulated by Bank Indonesia as the average yield between Current Economic Condition Index (CECI) and Consumer Expectation Index (CEI) in 18 big cities . CECI is an index that shows how consumers’ perceptions of economic conditions in their country at present time, how much confidence they have against the country, as measured by several factors such as household income, right time to buy durable goods and the unemployment rate. Meanwhile, the CEI is an index that measures the consumers’ average confidence about future prospects of several factors, such as : their expectation of future income, future jobs availability, and future general condition of their country. Indonesia’s Consumer Confidence is on a rising trend, this is in line with our country’s high GDP growth and good macro-economics indicators, even according to Nielsen, Indonesia in Q2, took India’s position as the country with the most confidence consumers in the world.
Although consumer confidence appears to be related to a number of economics...