Indonesia: Retail sales contract at sharpest pace since November 2008 in May
July 8, 2020
Retail sales nosedived 20.6% year-on-year in May (April: -16.9% yoy). May's result marked the worst reading since November 2008.
The reading reflected a broad-based downturn across the major sectors, with food, beverages, and tobacco, motor vehicles, parts and accessories and automotive fuels all contracting in May. Sales of cultural and recreation goods and information and communication equipment also fell.
Moreover, the trend pointed down, with the annual average variation of retail sales coming in at minus 3.0%, down from April's minus 0.7%.
The Bank expects retail sales to have contracted a milder 14.4% in June amid the lifting of some social distancing measures. However, retail sales readings over Q2 as a whole still suggest extremely weak private consumption in the period. H2 should see a gradual recovery in private consumption as further restrictions are lifted.
Author: Oliver Reynolds, Economist