BI Predicts Contraction in Retail Sales in July 2021

Bank Indonesia (BI) predicts that retail sales will continue to contract in July 2021. The implementation of the Level 4 Community Activity Restrictions (PPKM) is one of the factors hindering domestic retail sales.

This is reflected in the Real Retail Sales Index (IPR), which is expected to contract by 8.3% to 182.0 in July 2021 compared to the previous month (month-to-month/m-to-m). Similarly, compared to July 2020, the IPR experienced a 6.2% contraction (year-on-year/yoy).

All components of the IPR in July 2021 are expected to contract, with the "other goods" category leading the decline at 23.8% (m-to-m). Spare parts and accessories contracted by 22.9% (m-to-m), and motor vehicle fuel decreased by 18.6% (m-to-m).

Compared to July 2020, almost all components of the IPR index also experienced contractions. The largest contraction was experienced by the information and communication equipment component at 33.8% (yoy).

Furthermore, the cultural goods and recreation and spare parts and accessories components experienced contractions of 22.3% (yoy) and 11.5% (yoy), respectively. Only the motor vehicle fuel component is expected to grow by 9.1% (yoy).

From the same survey, retail sales in June 2021 again contracted by 12.8% compared to the previous month (m-to-m). All IPR components experienced contractions except for motor vehicle fuel, which grew by 9.9% (m-to-m). However, the IPR in June 2021 recorded a growth of 2.5% compared to June 2020 (yoy).