Bank Indonesia's Retail Sales Survey: Decline in July 2017
Indonesia's retail sales declined in July 2017 in line with the return to normal consumption patterns after the Ramadan and Idul Fitri celebrations ended. This is reflected in Bank Indonesia's retail sales index that showed a 3.3 percent decline year-on-year (y/y), after a 6.3 percent (y/y) increase in the preceding month. The decline in Indonesia's retail sales occurred in both food and non-food groups.
It was the first contraction in nearly six years. However, it needs to be added that data are distorted because the Islamic celebrations fell earlier in 2017 compared to 2016. This year they ended in June, while last year the Idul Fitri week fell in early July. Idul Fitri, which marks the end of the holy fasting month, always triggers a peak in consumption.
Respondents in the survey stated that sales of food and beverages as well as home furnishing and electronic appliances were weak in Indonesia, Southeast Asia's largest economy, in July 2017.
Bank Indonesia, the central bank of Indonesia, also said it expects retail sales to rebound in August 2017, for both food and non-food groups. This expectation is based on statements of respondents regarding their forecasts for August. Respondents also expect to see rising prices in the next three months.
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