Consumer Spending Strengthens Ahead of Eid, Retail Sales Forecast to Grow 6.9 Per Cent

Consumer spending typically increases during Ramadan and ahead of the national religious holidays, particularly Eid al-Fitr. This uptick is often reflected in the retail sector’s performance, which serves as a key indicator of domestic household consumption dynamics.

Signs of strengthening consumption are evident from the latest retail sales survey, which shows increased sales in early 2026, particularly as the Ramadan period and preparation for the national religious holiday of Eid al-Fitr approach.

Retail sales performance in February 2026 is forecast to grow both year-on-year and month-on-month. The Real Sales Index for February 2026 is projected to expand by 6.9 per cent year-on-year, according to a Bank Indonesia statement released on Tuesday, 10 March 2026.

Retail sales growth is being driven by increased sales across most categories, particularly spare parts and accessories, other household equipment, and clothing. Month-on-month, retail sales in February 2026 are forecast to increase by 4.4 per cent, driven by consumer demand during Ramadan and preparation for Eid al-Fitr 1447 Hijra.

In January 2026, the Real Sales Index grew 5.7 per cent year-on-year, primarily supported by increased sales in cultural goods and recreation, food, beverages and tobacco, and clothing. However, on a month-on-month basis, retail sales in January 2026 contracted by 2.7 per cent, reflecting the normalisation of consumer spending after the year-end national religious holidays of Christmas and New Year, which typically drive a surge in shopping.

Beyond sales developments, the survey also tracked price expectations for the coming months. Inflationary pressure over the next three months is forecast to decline, as reflected in the General Price Expectations Index for April 2026 of 153.9, lower than the March 2026 index of 175.7, as prices normalise following the Eid al-Fitr celebrations.

However, for the subsequent six months, price pressure is forecast to rise. The General Price Expectations Index for July 2026 is projected at 157.1, higher than the June 2026 index of 156.3, driven by price increases during the new school year.