Retail sales fell at a slower pace in January (-16.4% YoY; Dec: -19.2%)
Broad-based slowdown led by cultural and recreation (-53.0%; Dec: -40.0%), followed by apparel (-46.3%; Dec: -59.7%) and other goods (-44.5%; Dec: -55.0%).
MoM: smaller decline (-0.7%; Dec: -4.3%) attributable to a MoM growth rebound in stationery and communication (0.9%; Dec: -5.7%) and car spare parts and accessories (0.4%; Dec: -5.0%).
Weaker growth is expected to persist in February
Officially, the Real Sales Index (RSI) is expected to fall by 16.5% YoY in February due to a broad-based slowdown across all commodity groups and a base effect. On MoM, its growth contraction is expected to be reduced to -0.7% (Jan: -4.3%) in line with the improved consumer confidence index (85.8; Jan: 84.9).
YoY sales growth expected to moderate for the next three to six months
3-month Sales Expectation Index (SEI): growth to moderate in April (6.4%; expected Mar: 15.9%).
6-month SEI: slower growth expected in July (8.1%; expected Jun: 18.0%).
Inflationary pressure is expected to remain weak for the next three to six months
3-month Price Expectations Index (PEI): lower growth contraction in April (-5.2% YoY; expected Mar: -6.5%).
6-month PEI: growth expected to fall sharply in July (-5.2% YoY; expected Jun: -0.7%).
Extended micro-scale restriction to weigh on growth recovery
Retail sales will continue to remain under pressure in the near term, given that the government has extended micro-scale restriction until March 22 in Java and Bali. Though new COVID-19 daily cases have somewhat reduced, the impact of movement restriction is expected to weigh on growth recovery.
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