Consumer Confidence Rebounds to 118.5 as Stimulus Measures Fuel Economic Turnaround

JAKARTA, Investortrust.id — Consumer sentiment across Southeast Asia’s largest economy snapped a six-month downtrend in August 2026, climbing to 118.5 on the back of aggressive state-backed fiscal stimulus.

The rebound marks the first major sentiment reversal since early 2026, signaling that public interventions are taking hold in the broader economy.

Private consumption accounts for more than half of domestic output, making consumer sentiment a vital barometer for emerging-market investors tracking Southeast Asian growth. The inflection points to stabilization in real household activity, helping validate recent equity market gains and insulating domestic demand against global headwinds.

Speaking at the National Single Window Agency (LNSW) office in Jakarta on Wednesday, Sept. 9, 2026, Finance Minister Purbaya Yudhi Sadewa underscored that the reading shows early policy success.

"Looking at the trend this August, this is quite a good figure," Purbaya said. "If we look previously, it had been declining until July 2026 at 116."

Stimulus Reaches the Real Economy

According to Purbaya, the rebound reflects direct economic transmission from fiscal support deployed in late July and early August.

"This means that in all likelihood, the improvements we are seeing in the capital and financial markets are reflecting real improvements in our economy," he said.

Data compiled by central bank Bank Indonesia (BI) shows consumer sentiment had slid steadily after touching 127 in January 2026, hitting a trough of 116.8 in July.

"This is the first turnaround," Purbaya noted. "A positive signal. Hopefully, conditions will continue to improve moving forward. September should be even better."

Liquidity Measures and Regional Cash Injections

To cement the recovery, the government is steering liquidity directly through the banking system to sustain purchasing power.

Purbaya stated that authorities instructed Public Service Agencies (BLU) to cap interest rates on their banking deposits at a maximum of 80% of the benchmark BI Rate, discouraging idle cash hoardings.

"Moreover, the President has disbursed Rp 20.5 trillion ($1.29 billion) directly to regional governments," Purbaya added. "That money enters the system. We will evaluate what additional levers we can push."

Broad-Based Gains in Labor and Spending

Central bank survey findings show overall optimism was lifted by stronger evaluations of present conditions and solid forward-looking expectations.

The Current Economic Condition Index (IKE) rose to 109.4 from 107.9 in July, while the Consumer Expectation Index (IEK) reached 127.6.

The job availability component climbed to 104.1 from 101.1, while the durable goods purchase index rose to 106.1 from 104.1.

In contrast, the current income index moderated slightly to 118 from 118.5 in July, while remaining comfortably in optimistic territory above the 100-point threshold.

Geographically, consumer confidence gains were led by urban centers including Bandung, Jakarta, and Medan, while sentiment softened in Padang, Surabaya, and Manado.