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Indonesian retail sales growth slows

Retail sales growth in Indonesia is showing further signs of slowing down.

A Bank of Indonesia survey shows an annual retail growth rate of 14.1 per cent in November – well down on the October rate of 17.6 per cent, but still significantly higher than September’s 8.9 per cent.

The bank surveys 650 retailers in 10 major cities each month to produce a statistic valuable for its trend reflection.

The bank said it expects December’s figure to show a further decline, along with January and February, as sales are affected by weakening consumer sentiment, softening demand and the monsoon weather season, which disrupts distribution networks.

It predicts the percentage rate will rise again in May as the market returns to normal.

While the price of oil continues to drop globally, potentially impacting on distribution costs, Indonesia’s new government has used this as an opportunity to reduce fuel subsidies and inflationary pressure remains across the nation.

Retailers say increased sales of computers and smartphones contributed significantly to the September boom.

A longer term trend in Indonesia is the steadily increasing pool of disposable income in the nation as the middle class expands.

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