Bleak retail sales in Indonesia are expected to continue in the second half (H2) of 2017 amid weak consumer purchasing power. Yongky Susilo, Executive Director at Retailer Services Nielsen Indonesia, expects the nation’s retail sales growth to be 6% year-on-year (y/y). Normally, the growth pace of retail sales in Southeast Asia’s largest economy averages 10-11% (y/y). In H1, Indonesian retail sales expanded by about 4% (y/y), unable to use the Ramadan and Idul Fitri momentum to boost sales significantly. Susilo says retail sales have been weak in Indonesia so far because purchasing power of the lower middle class segment is weak, while the higher middle class and elite segments of the population are still reluctant to boost spending. Higher inflation may also be a reason. Indonesian inflation accelerated to 4.37% (y/y) in June 2017.
