Retail sector economy prime mover<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
Despite the current strained economic conditions, the retail
\nsector is expected to show resilience and keep growing on the
\nback of strong consumer spending, thus keeping the country's
\neconomic wheels moving.<\/p>\n
Economists said that the retail sector would be the prime
\nmover of the country's economic growth, pushing other sectors to
\ngrow as well.<\/p>\n
Citibank economist Anton Gunawan stated a growing retail
\nsector came as no surprise, in line with strong consumer
\nspending, which was the foundation of the country's economic
\ngrowth last year.<\/p>\n
"The retail sector grows due to strong consumption on food-
\nrelated products, textiles and durable goods, such as electronics
\nand cars," he said over the weekend.<\/p>\n
Standard Chartered Bank economist Fauzi Ichsan, also shared
\nthe same view: "During the crisis, it has been proven that the
\nretail sector has managed to keep growing, even under these
\nunfavorable conditions."<\/p>\n
Both agreed on the importance of a growing retail sector and
\nits contribution to overall growth, as it could generate other
\nsectors to move.<\/p>\n
Strong consumer spending allows people to spend money in
\nretailers to fulfill their needs.<\/p>\n
When this happens, industries related to food or clothing or
\nelectronics, will eventually grow as well, giving a boost to the
\nwhole economic activity.<\/p>\n
The International Monetary Funds (IMF) stressed last week the
\nimportance of the retail sector by calling on the country's
\nbanking sector to give a larger portion of lending to retailers.<\/p>\n
With a significant drop in exports and investment flow, the
\ncountry's economy has been relying heavily on strong domestic
\nconsumption to prop up its growth.<\/p>\n
Last year, Indonesia managed to defy a declining trend of
\neconomic growth in the region by posting an impressive 3.5
\npercent growth, thanks to high consumption expenditure.<\/p>\n
The trend is expected to continue this year, with consumer
\nspending surpassing exports and domestic investment, both which
\nhave been declining.<\/p>\n
Assuming consumption remains robust, the government has
\ntargeted the economy to grow by 4 percent this year.<\/p>\n
Exports, which used to be the key mover of economic growth,
\nhave been badly hit by the global downturn and would remain so
\nuntil after the first half of the year when the world's major
\neconomies like the U.S. and Japan are expected to bounce back.<\/p>\n
As for the domestic investment sector, analysts believe it
\nwill still be difficult to come by because of the prolonged
\neconomic and political uncertainty.<\/p>\n
Aside from the retail sector however, the construction and
\nagriculture sector would also play an important part in moving
\nthe wheels of the economy.<\/p>\n
According to Anton, the construction sector grew significantly
\nlast year, especially in housing projects for medium and lower
\nincome groups, and would continue to grow this year.<\/p>\n
"This sector is also growing, this is good, because it will
\ngenerate a demand for supporting goods, such as cement, steel and
\nso on," he said.<\/p>\n
Meanwhile, Fauzi underscored that the agriculture sector was
\none of the driving forces of the economy as it remains the
\ndominant sector in terms of absorbing manpower.<\/p>\n
"Despite being a traditional sector, some 40 percent to 50
\npercent of workers in the country are involved in this sector,"
\nFauzi said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/retail-sector-economy-prime-mover-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
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