Jakarta: The latest Retail Sales Survey conducted by Bank Indonesia (BI) confirmed increased retail sales growth in May 2019, driven by seasonal factors.
The Real Sales Index (RSI) grew by 7.7% (yoy) from 6.7% (yoy) in April 2019. The increase was mainly driven by sales of Clothing, Spare Parts and Accessories, as well as Food, Beverages & Tobacco along with increasing demand during the Ramadan month and ahead of the celebration of Eid Al-Fitr.
The RSI was expected to grow by 2.2% (yoy) in June 2019. It was in line with the normal return to demand after the Ramadan month and the celebration of Eid Al-Fitr.
"The RSI growth in June 2019 was supported by Spare Parts and Accessories as well as Clothing," the central bank said in a press statement released on Tuesday.
According to the latest survey, retailers predicted milder inflationary pressures in the next 3 months (August 2019), as indicated by a significant decline in the corresponding Price Expectations Index (PEI) to 138.3 from 160.5 the month earlier.
Meanwhile, a general softening of national economic growth has occurred during the second quarter of 2019 as a corollary of declining export performance.
The recent escalation of international trade tensions has undermined export performance in Indonesia due to restrained global demand and lower commodity prices despite relative improvements for a number of commodities, including chemicals, iron and steel, coal as well as vegetable oil.
Non-building investment has thus far failed to increase significantly as a consequence of flagging exports notwithstanding positive building investment growth. Meanwhile, consumption is expected to pick up on the back of maintained public purchasing power and consumer confidence. Limited domestic demand gains have fed through to lower imports. Moving forward, efforts to stimulate domestic demand shall be increased in order to mitigate the adverse impact of global economic moderation stemming from international trade tensions.