Household Spending in Indonesia to Contract Further with Second Lockdown: Fitch Solutions

Fitch Solutions has estimated that Indonesia’s household spending could contract 1.8% year-on-year (YoY) in 2020, warning that it could take longer than expected to recover to pre-pandemic levels. According to Fitch Solutions, demand side risks will further hinder the recovery in Indonesia’s consumer spending, with retail sales likely to see further contractions over the next few months, leading to a longer recovery.

A survey conducted by Bank Indonesia indicated that retail sales in the country declined 12.3% YoY in July 2020, lower than the 17.1% contraction recorded in June 2020. According to the survey, retail sales are projected to fall 10.1% YoY in August 2020.

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