Indonesia: Decline in retail sales softens in September, but sharper fall forecast for October
November 11, 2020
Retail sales fell 8.8% in year-on-year terms in September, which was a smaller drop than August's 9.2% decrease. The print marked the best result since March. Looking at the details of the release, September's softer drop was broad-based, with food, beverages, and tobacco sales expanding at a faster pace, and, motor vehicles, parts and accessories and automotive fuels sub-sectors contracting at slower paces.
Meanwhile, the trend pointed down, with the annual average variation of retail sales coming in at minus 7.4%, down from August's minus 6.7%.
The Central Bank expects retail sales to have contracted a sharper 10.0% in October, amid tougher Covid-19 restrictions in Jakarta in the first half of the month. After a sharp fall in private consumption in Q3, October’s reading suggests weak consumer spending at the outset of the final quarter.
Author: Oliver Reynolds, Economist