Indonesia: Retail sales contract in June, soft outturn seen in July
August 8, 2019
In June, retail sales fell 1.8% year-on-year, contrasting May’s 7.7% expansion and missing the Central Bank’s initial estimate of a 2.2% expansion. June’s decline came amid lower sales of food and fuel. However, the decline was due in part to the timing of Ramadan, which fell almost entirely in May this year—consumer spending tends to rise during Ramadan. The ebbing impact of pre-election public spending could have also played a role. According to the Bank of Indonesia’s survey, retail sales should have grown 2.3% in July.
Despite soft retail sales readings for June and July, the outlook for private consumption is fairly positive, thanks to solid wage growth and mild price pressures.
Author: Oliver Reynolds, Economist