JAKARTA - The Indonesian Retail Entrepreneurs Association (Aprindo) projects that retail performance in the second quarter of 2024 will decrease when compared to the first quarter.
Chairman of Aprindo Roy Nicholas Mandey said, there are several reasons this decline will occur. First, it is normal for shopping to decrease after an increase in spending supported by the Eid period.
"It will definitely go down because after Lebaran every year, people tighten their belts to hold back spending, because of what? Preparations for them to enter June or July if they have children," Roy said at the Halalbihalal event at the Manado Spice, Jakarta, quoted Wednesday, May 8.
The retail growth in the first quarter of 2024 reached around 5-7 percent on an annual basis (yoy). This growth is a contribution from the election. Government consumption increased 6.25 percent throughout the 2024 election.
"The consumption growth in the second quarter will decrease, so retail performance will automatically also drop to 4-5 percent. So, the margin is thinner," he said.
The second reason for the decline in retail growth was due to banking interest fluctuations or an increase in the benchmark interest rate of Bank Indonesia (BI) to 6.25 percent.
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According to Roy, this will help raise public spending to pay installments due to increased credit interest.
"Because the increase in interest has to pay higher, right, installments. Well, instead of losing houses, cars, motorbikes, it's better if consumption is reduced," he said.
Even so, Roy is optimistic that household consumption in the second quarter of 2024 will still grow in the range of 3.8-4 percent yoy as public consumption peaks pass. Coupled with the consumer confidence index (IKK) which will remain moderate as long as inflation is still under control.
"It can be seen from the achievement of household consumption growth in the first quarter of 2024 reaching 4.91 percent yoy or the highest post-pandemic," he added.
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