Aldira Sunrise 11 Juni 2024

Economy: Consumers less confident about the economy
Bank Indonesia’s (BI) survey stated that the consumer confidence index (CCI) stood at 125.2 in May; however, it was lower than April’s 127.7. Data shows that consumers who spend within a range of IDR 4.1M and IDR 5M are the most optimistic compared to other groups, recording a CCI score of 129.1. The least confident are those who spend IDR 1M – 2M (114.9). Consumers who are between 31 and 40 years old have a CCI of 128.3, making them the most confident among other age groups. Consumers who are older than 60 are the least optimistic. (Jakarta Globe, BI)
What we think: The lower CCI was seen across income groups, which may indicate consumers are cautious about Indonesia’s economic outlook.
Cigarette excise tax to rise again in 2025
The government is certain to increase the excise tax on tobacco products in 2025 after obtaining approval from the Parliament. Director General of Customs and Excise (Dirjen BC) Askolani said that there would be adjustments to the excise rates because the multiyear rates that have been determined will end at the end of 2024. Referring to Minister of Finance Regulation (PMK) No. 191/2022, cigarette excise rates in 2023-2024 increased by an average of 10% and a maximum of 5% for hand-rolled kretek cigarettes (SKT). The regulation is in effect on a multi-year basis for 2 years from 2023-2024. (Bisnis Indonesia)
What we think: The increase in excise tax, in addition to a rise in VAT for cigarettes along with the increase in the general VAT rate from 11% to 12% in 2025, will continue to put pressure on tobacco companies.