Indonesia's retail sector expected to witness faster growth in 2016 on accelerating economy: association

Foods and clothing retailers are estimated to expand at a faster pace this year as faster economic growth has boosted purchasing power.

Chairman of Indonesian Retailers Association (Aprindo) Roy Mandey on Wednesday disclosed that the association was upbeat over a 10-percent growth in the retailer industry this year, compared with 8 percent last year, as the country's macro-economic condition improved.

"For this year, we are optimistic it can expand 10 percent or 200 trillion rupiah (equal to 14.873 billion U.S. dollars)," Roy said.

Indonesia's economy accelerated 4.79 percent last year and is projected to grow 5.1 percent this year.

The chairman revealed that the people's purchasing power had started improving amid lower inflation, and relatively stable energy prices, including tariffs of electricity, and prices of fuel and gas.

The central bank's aggressive loosening policy by cutting 150 basis points rate this year had slashed cost of funds, said Roy.

"The central bank's aggressive rate cut had helped people to borrow fund with lower interest," he said.

Besides, simplification of bureaucracy and the process for having business license, as well as deregulation, parts of the government's series stimulus packages unveiled since September, had also given a favorable condition for the growth of retailer sector, said Roy.

Indonesia's economy is also projected to expand steadily at a moderate level next year amid constrictions in some other economies.

Consumption contributes, the most, to the gross domestic product in Indonesia, which is home to over 250 million people. Endit