Retail sales growth slumps in October: BI

BANK INDONESIA / BI - JAKARTA. Bank Indonesia’s survey on the retail sector has shown that sales growth in October declined to less than half the figure in September.

The BI survey records a 2.9 percent year-on-year (yoy) retail sales index (RSI) for October, lower than the 4.8 percent yoy RSI for September.

The highest growth was recorded in clothing and public transportation fuel, which respectively contributed 24.6 percent and 17.9 percent, says BI, adding that the RSI was expected to increase in November and December due to the Christmas and New Year holiday season.

The central bank added that retail sales growth in November and December would still be driven by sales in clothing and public transport fuel, as well as recreational goods.

BI projects that high prices would continue to pressure retail sales in the first months of 2019, as indicated by an increase in the price expectation index (IEH) to 163.9, compared to an IEH of 159.3 in its previous survey.

The increase in prices was in line with producers' planned adjustments in early 2019, it said.

The bank added that inflationary pressures would start to calm in April 2019 as indicated by a decline in the IEH from 173.3 to 172.4 in March.

Bank Indonesia also projected that retail sales growth would again slow in January 2019 following the yearend holiday season, as indicated by a decline in RSI from 165.9 to Rp 156.0 in December.