Bank Indonesia (BI) reported the Retail Sales Index (RSI) lowering to 1.1 percent in August, after a 2.4 percent increase in the previous month, the central bank survey showed on Wednesday (10/09) - Photo: Privacy

JAKARTA (TheInsiderStories) – Bank Indonesia reported retail sales in Indonesia increased 0.7 percent year-on-year in September 2019, down from a 1.1 percent rise the previous month. This was the smallest growth in retail sales since June when retail trade dropped by 1.8 percent, the central bank survey showed on Wednesday (11/06).

Retail sales are expected to increase in October 2019. It is indicated by the retail index in October which is predicted to grow by 2.9 percent (YoY). The increase was driven by increased sales in the parts and accessories group, the information and communication equipment group, and the food, beverage, and tobacco group.

The survey result also indicated that upward pressure on prices at retail traders will increase in the next three months. It is reflected in the coming three-month General Price Expectation Index of 153.1, higher than the previous month’s index of 140.

Retail sales also influenced Indonesia’s economic growth. Meanwhile, Indonesia’s annual economic growth lowering to 5.02 percent in the third quarter (3Q) of 2019 after a 5.05 and 5.07 percent growth in the second and first quarter, also lower than 5.17 percent in the same quarter last year. It was the weakest growth since the June quarter of 2017.

However, cumulatively, Indonesia’s gross domestic product reached 5.04 percent, expanded 3.06 percent quarter-on-quarter in the three months to September 2019, head of statistics agency Suhariyanto said in a press conference.

“Indonesia’s economic growth in the third quarter of 2019 was recorded at 5.02 percent. Compared to the same period of 2018 economic growth grew 3.06 percent,” he said.

From the production side, growth was driven by almost all business fields, with the highest growth being achieved by other service business fields which grew 10.72 percent. In terms of expenses, the highest growth was achieved by the nonprofit consumption expenditure component serving households which grew by 7.44 percent.

The agency also recorded the price of oil and gas and non-oil commodities on the international market in 3Q of 2019, in general, to decline in the quarter and annual basis. This certainly affects the Indonesian economy, Suhariyanto said.

One of them is a decline in the average price of Indonesian crude palm oil in 3Q of 2019, a 16.5 percent decline from the second quarter of 2018. Then coal fell 42.7 percent and palm oil dropped 6.85 percent, while rubber prices rose 1.79 percent.

“On the other hand, of Indonesia’s four main trading partners, the economy is growing but tends to slow down including China, the United States, South Korea, and Singapore. These are all factors that affect Indonesia’s economic growth,” he explained.

The spatial structure of the Indonesian economy in 3Q was dominated by provincial groups in Java and Sumatra. Java Island had 59.15 percent, the largest contribution to Indonesia’s GDP, followed by Sumatra 21.14 percent, and Kalimantan 7.95 percent. Meanwhile, Sulawesi with a contribution of 6.43 percent has the highest growth rate.

Written by Staff Editor, Email: theinsiderstories@gmail.com