Indonesia’s Retail Sales Grow 10.1% in March

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) – Indonesian retail sales grew 10.1 percent in March, up from February at 9.1 percent in, proven by the Real Sales Index of the Bank Indonesia (BI) today. The index is mainly sourced from the clothing subgroup and the group of parts and accessories.

Based on the sales survey data, retail sales are expected to continue grow positively in April, although not as strong as the growth of the previous period. Its indicated by the real sales index which is estimated to grow 5.7 percent, slower compared to 10.1 percent in March.

However, the real sales index in April 2019 is predicted to grow higher compared to the growth in the same period the previous year of 4.1 percent. This positive growth was supported by sales of the Clothing subgroup and the Parts and Accessories group.

The survey results indicate that price pressures at the retail trade level in the next three months are increasing. Its reflected in the upcoming three-month General Price Expectation Index of 174.6, up from 153.9 in the previous month, influenced by inflationary pressure which tends to increase ahead of the celebration of Eid Al-Fitr.

Increasing or decreasing direct sales influence Indonesia’ economic growth. The domestic economic growth shrank to 0.52 percent in the three months to March (1Q), following a contraction of 1.69 percent in 1Q 2018.

Head of Indonesian Statistics Suhariyanto, said this is the weakest growth rate since the 1Q, as private consumption and investment continued to rise more gently, while government spending continued to increase and net exports contributed negatively to GDP.

Suhariyanto reports that the Indonesian economy is based on the GDP magnitude based on current prices in 1Q 2019 reaching Rp3,782 trillion and based on constant 2010 prices reaching Rp2,625 trillion.

The declined of Indonesia’ economic growth simultaneously with the estimate of Institute of Chartered Accountants in England and Wales (ICAEW), that expected Indonesia’ GDP to decline to 5.0 percent in 2019, from 5.2 percent in 2018, due to a slowdown in net export growth.

According to ICAEW analysis, the decline was due to reducing of export growth as trade protection became tighter and demand Chinese imports weakened. Also, it was driven by weak global economic activity at the end of 2018 and declining exports, where only Malaysia recorded by positive growth.

ICAEW Economic Advisor & Oxford Economics Lead Asia’s economist Sian Fenner stated, in Indonesia, the domestic demand remained the critical engine of growth in this quarter, although the data was mixed. GDP growth rose in the 4Q of 2018 to 5.2 percent, unchanged from the previous quarter and bringing full-year growth to 5.2 percent, up slightly from 5.1 percent in 2017.

Meanwhile, the consumer spending picked-up slightly, growing 5.1 percent year-on-year, helped by mild inflation and a healthy labor market.

He viewed in the future modestly higher inflation and lower planned increases in minimum wages compared to last year are likely to dampen real household income growth and consumption growth, offsetting the impact of pre-election giveaways in the 2018 Budget.

The potential for a worsening report on the financial position of state-owned enterprises (SOEs), uncertainty in the profitability of several infrastructure projects, and a more significant current account deficit are challenges the economic prospects.

Written by Staff Editor, Email: theinsiders