The latest Consumer Confidence Index (CCI) for Indonesia, released on October 8, 2025, registered at 115.00, falling short of the 120.00 consensus estimate and down from September’s 117.20 reading. This marks a continuation of the downward trend since mid-2025, reflecting growing caution among Indonesian consumers amid global and domestic headwinds. The Sigmanomics database confirms this is the lowest confidence level since June 2024, signaling potential softness in household spending and economic momentum.

Drivers this month

• Rising inflation pressures, particularly food and energy costs, eroding purchasing power.
• Heightened geopolitical tensions in Southeast Asia affecting trade sentiment.
• Slower wage growth and job market concerns dampening optimism.

Policy pulse

Consumer confidence remains below the central bank’s comfort zone, complicating Bank Indonesia’s monetary stance. The current CCI level suggests subdued consumer demand, which may delay further rate hikes despite inflationary pressures.

Market lens

Immediate reaction: The Indonesian rupiah (IDRUSD) weakened 0.30% post-release, while the 2-year government bond yield edged down 5 basis points, reflecting investor caution.

Indonesia’s consumer confidence is a bellwether for domestic demand, which accounts for roughly 57% of GDP. The October reading of 115.00 contrasts with the 12-month average of 121.30, underscoring a notable loss of momentum. Inflation remains elevated at 5.10% YoY as of September, above Bank Indonesia’s 3% target, pressuring real incomes. Meanwhile, unemployment ticked up slightly to 5.30%, adding to consumer unease.

Monetary Policy & Financial Conditions

Bank Indonesia has maintained a cautious tightening cycle, with the benchmark 7-day reverse repo rate steady at 5.75%. Financial conditions have tightened moderately, with credit growth slowing to 9.20% YoY in Q3 2025. The subdued consumer confidence suggests that monetary policy may remain on hold or pause to avoid choking off growth.

Fiscal Policy & Government Budget

The government’s fiscal stance remains expansionary, with a 2025 budget deficit projected at 2.80% of GDP. Increased social spending and infrastructure investments aim to support growth and cushion vulnerable households. However, fiscal space is limited by rising debt-to-GDP ratios, constraining aggressive stimulus measures.

Historical comparisons reveal that the current confidence level is 10% below the January 2025 peak of 127.70, reflecting the impact of inflation and geopolitical risks. The index’s decline aligns with a slowdown in retail sales growth, which decelerated to 3.50% YoY in Q3 2025 from 5.10% earlier in the year.

Market lens

Immediate reaction: Following the release, the Indonesian rupiah (IDRUSD) depreciated by 0.30%, while the 2-year government bond yield fell by 5 basis points, reflecting increased risk aversion and expectations of a more dovish monetary policy stance.

Looking ahead, Indonesia’s consumer confidence trajectory will hinge on several factors. Inflationary pressures may ease if global commodity prices stabilize, potentially supporting a rebound in sentiment. Conversely, persistent geopolitical tensions and slower wage growth could deepen consumer caution.

Bullish scenario (30% probability)

• Inflation moderates below 4% by Q1 2026.
• Strong government stimulus boosts disposable incomes.
• Consumer confidence rebounds above 120 by mid-2026, supporting robust consumption growth.

Base scenario (50% probability)

• Inflation remains near 5%, limiting real income gains.
• Fiscal support continues but is constrained by debt levels.
• Consumer confidence stabilizes around 115-118, leading to moderate GDP growth of 5.00% in 2026.

Bearish scenario (20% probability)

• Inflation spikes above 6% due to supply shocks.
• Geopolitical risks escalate, disrupting trade and investment.
• Consumer confidence falls below 110, triggering a slowdown in consumption and GDP growth below 4.50%.

Indonesia’s October 2025 Consumer Confidence reading reflects a cautious consumer base grappling with inflation and external uncertainties. While the decline is concerning, the government’s fiscal measures and Bank Indonesia’s calibrated monetary policy provide buffers. Monitoring inflation trends and geopolitical developments will be critical for assessing the near-term outlook. Investors and policymakers should prepare for a range of scenarios, balancing optimism for recovery with vigilance against downside risks.

Insight: Consumer Confidence vs. BBCA Stock Performance Since 2020

Since 2020, Indonesia’s Consumer Confidence Index and BBCA stock price have shown a positive correlation, with confidence dips often preceding short-term declines in BBCA shares. For example, the 2025 mid-year confidence drop from 127.70 to 117.50 coincided with a 7% pullback in BBCA. This relationship underscores how consumer sentiment drives credit demand and banking sector profitability.

Year	Avg Consumer Confidence	BBCA Annual Return (%)
2020	105.40	-12.30
2021	115.80	18.70
2022	120.10	10.20
2023	122.50	15.40
2024	119.70	8.90
2025 (YTD)	118.30	4.50

FAQs

What is the current state of Indonesia’s Consumer Confidence?

The October 2025 Consumer Confidence Index stands at 115.00, down from 117.20 in September, reflecting increased consumer caution amid inflation and geopolitical risks.

How does Consumer Confidence affect Indonesia’s economy?

Consumer Confidence influences household spending, which drives over half of Indonesia’s GDP. Lower confidence typically signals weaker consumption and slower economic growth.

What are the key risks to Indonesia’s Consumer Confidence outlook?

Risks include persistent inflation above target, geopolitical tensions disrupting trade, and slower wage growth, all of which could further dampen consumer sentiment.

Takeaway: Indonesia’s October 2025 Consumer Confidence decline signals caution ahead for consumption and growth, warranting close monitoring of inflation and geopolitical developments.