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Holiday season lifts retail spirits, but rising prices lie ahead
Retailers predict a buildup of inflationary pressure in the first half of the year amid signs of higher input costs.
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Christmas decorations liven up at a shopping mall in Jakarta on Dec. 22, 2021. (AFP/Adek Berry)
T
he latest retail sales survey conducted by Bank Indonesia (BI) shows respondents expecting sales to surge in December 2021 on the back of a seasonal spike in demand during the Christmas and New Year holidays.
The retail sales index rose 3 percent on the month to a reading of 206.9, driven primarily by cultural and recreational goods, information and communication equipment, as well as clothing, the central bank announced in a press release on Tuesday.
“Annually, retailers predicted 8.9 percent sales growth led by automotive fuels,” BI added.
The figure marked a decrease from year-on-year growth of 10.8 percent in November and 6.5 percent in October 2021.
Following a month-to-month (mtm) increase of 2.8 percent in November and 3.2 percent in October, the rise in retail sales points to a firming recovery of household spending.
The recovery comes after a serious blow dealt to the retail sector by virus containment measures imposed by the government in the third quarter of 2021 in response to the summer spike in COVID-19 cases.
Household spending, long a key driver of Indonesia’s economy, had been lagging behind other indicators that signal an overall recovery in business activity as restrictions were relaxed.
