• Indonesia’s Consumer Confidence Index (CCI) edged down 0.4pts MoM to 118.1 in Sep-26, reversing Aug-26’s modest recovery and warranting caution over the strength of domestic demand. Although the index remained above the 100-point neutral threshold, weaker perceptions of current conditions suggest household confidence remains fragile.
• Down to its lowest level in 12 months, Current Economic Conditions Index fell 1.9pts to 107.5, while perceptions of job availability dropped 3.0pts to 101.1, barely above neutral. This signals growing concern over employment opportunities, which could encourage households to prioritize essential spending and postpone discretionary purchases, particularly if weaker employment sentiment reflect declining actual hiring or lower household incomes.
• However, forward-looking indicators provided some support, with income and employment expectations rising 2.0pts each to 136.9 and 127.7, respectively. Nevertheless, business activity expectations slipped 0.6pts to 121.5, while durable goods purchasing sentiment improved only modestly to 106.7. The gap between stronger expectations and weaker current conditions suggests any sustained consumption recovery remains dependent on tangible improvements in employment and real incomes.
• That said, we maintain a cautious outlook for household consumption through end-2026, in particular that inflation acceleration to 3.28% from 3.19% could constrain purchasing power and limit the spillover into consumer spending. Thus, SSI’s 2026 GDP growth forecast of 5.35% remains subject to downside risks if employment conditions fail to improve or price pressures persist, while Bank Indonesia’s need to preserve IDR stability will limit room for monetary support.