Driven by robust sales in food, beverages, tobacco, and automotive parts, Indonesian retailers are optimistic about a 1% increase in sales in December 2024 compared to the same period last year, according to a recent report from Bank Indonesia based on its monthly survey. In November, the retail sector already observed a 0.9% uptick in sales year-over-year, evidencing a resilient market.
Additionally, the survey indicates a projected 5.1% growth of retail sales in December compared to November, following a slight 0.4% month-on-month contraction from October to November. The strongest contributors to retail spending in November were automotive fuel, spare parts and accessories, alongside the food, beverages, and tobacco segments.
As the Ramadan holidays approach, survey participants anticipate a build-up of price inflation pressures that could extend into February. However, once the festive period concludes, retailers expect inflation pressures to ease due to a likely normalization of demand post-Eid-ul-Fitr. This forecast aligns with the broader economic context, where Indonesia’s gross domestic product (GDP) has demonstrated promising growth in the post-pandemic era, positioning the nation as one of the fastest-growing economies in Southeast Asia. Bank Indonesia's projections suggest that the country's GDP will expand between 4.8% and 5.6% year-on-year in 2025, building on an anticipated growth of 4.7% to 5.5% in 2024.
This positive economic sentiment indicates a favorable environment for retailers as consumer confidence and spending steadily recover..