Macro Update - Aug-26 Consumer Confidence: A Recovery Still Running on Savings

The CCI rose to 118.5 in Aug-26 from 116.8 in Jul-26 after three consecutive monthly declines. CECI increased to 109.4 and CEI to 127.6, but the 18.2-point gap shows households remain considerably more optimistic about the outlook than their current income and purchasing conditions.

The recovery was not broad-based. The IDR4.1–5.0mn expenditure group was the only cohort to record weaker confidence, while labor-market confidence declined among university and postgraduate respondents. This suggests purchasing-power improvement remains uneven, particularly for households exposed to higher living costs and uncertainty around skilled employment.

Savings allocation declined most among households spending IDR1–4mn, while consumption increased across almost all expenditure groups. This can support near-term demand, but with inflation at 3.19% YoY, lower savings also point to thinner household buffers rather than a broad acceleration in real income.

The CCI provides a constructive but still limited signal for consumer staples, affordable discretionary products, and selected durable goods. A more sustained consumption recovery will require stronger real income, improved employment prospects, and stable inflation. Until these conditions strengthen, we maintain a selective portfolio stance, favoring fundamentally strong equities with resilient earnings and cash flow. Money-market funds remain the liquidity anchor, while fixed-income funds remain favorable, with gradual accumulation providing flexibility as bond-market opportunities improve.