Retail sales in Indonesia strengthened in February ahead of the Ramadan and Idul Fitri festive season, although consumer confidence weakened as households grew more cautious about the economic outlook, according to central bank data and market reports. 

Preliminary data from Bank Indonesia (BI) shows the country’s Retail Sales Index (RSI) is projected to reach 233.5 points in February, marking a 6.9 percent year-on-year increase from 218.5 points in the same month last year, The Jakarta Post reported. 

BI spokesman Ramdan Denny Prakoso said the growth was driven by rising demand during Ramadan, which this year began in late February, as well as preparations for Idul Fitri celebrations in March. 

Sales of spare parts and accessories led the expansion, rising 13.6 percent year-on-year, alongside cultural and recreational goods, which recorded the same growth rate. 

The increase in automotive-related spending reflects Indonesia’s mudik tradition, when millions travel long distances to their hometowns during Idul Fitri. Many Indonesians rely on private vehicles for the journey and typically prepare them with maintenance and repairs before traveling. 

Spending also increased for food, beverages and tobacco, which grew 8.3 percent year-on-year, while clothing sales rose 8.4 percent, reflecting common Ramadan practices such as purchasing food for breaking the fast and new outfits for Eid celebrations. 

However, sales of information and communication devices remained weak, contracting 22.5 percent year-on-year, continuing a negative trend that has persisted since early 2023. 

Data cited by Jakarta Globe also showed stronger demand for durable goods. Car wholesales rose 12.2 percent year-on-year in February, while retail sales increased 11.9 percent, according to the Association of Indonesian Automotive Manufacturers (Gaikindo). 

Despite stronger retail activity, overall consumer sentiment weakened slightly. Indonesia’s Consumer Confidence Index (CCI) fell to 125.2 points in February, down from 127 points in January, according to Bank Indonesia. 

While the current economic conditions subindex improved slightly to 115.9 points, reflecting modest optimism about current income levels and job availability, expectations for the coming six months declined. 

The consumer expectations subindex fell to 134.4 points from 138.8 points, as expectations for income, employment opportunities and business conditions weakened. 

According to Permata Bank chief economist Josua Pardede, the decline indicates that households are becoming more cautious about the economic outlook. 

“This signifies that households are beginning to curb spending and choose to be more cautious about prices, income and economic conditions in the coming months,” Pardede said in an analysis cited by The Jakarta Post. 

However, the pace of retail growth this year may also reflect calendar effects rather than weakening consumption. 

According to Kontan, the start of Ramadan on February 19 means the seasonal spending boost is spread across February and March, unlike last year when the holiday period was concentrated in a single month. 

As a result, the peak in Ramadan-related spending may shift toward March, supported by holiday allowances for civil servants and transportation discounts introduced closer to the Idul Fitri travel period, Pardede told Kontan. 

Bank Indonesia also reported rising expectations for future retail activity. The retail sales expectations index for March climbed to 146.8, reflecting stronger demand ahead of Ramadan and Idul Fitri. 

Analysts expect consumption to remain stable in April and rise again in July during the school holiday period, another seasonal peak for spending. 

Even with a more gradual increase this year, economists say the consumption rebound continues to support economic activity across sectors ranging from retail and logistics to food production and small businesses ahead of the Lebaran holiday season, Kontan reported.