Indonesia’s retail recovery hinges on vaccine rollout: report

Consumer confidence and retail sales remain below pre-pandemic levels.

The recovery in retail sales in Indonesia will rely on the ability of the government to vaccinate enough of the population, so as to allow for the gradual easing of restrictions, according to a report from Fitch Solutions.

As of 22 June, Indonesia had administered 13.4 vaccine doses per 100 people, significantly lower than the Asia region as a whole, which had administered 35.5 doses.

Consumer confidence in Indonesia has been slow to improve but is on an upward trajectory. The latest recordings for May showed a significant improvement from May of the previous year, but is still considerably lower than the pre-COVID-19 environment, Fitch noted. Similarly, when accounting for base effects, retail sales remain depressed.

“We hold the view that neither indicator will make a sufficient recovery until a majority of the country's population is vaccinated so as to allow for the lifting of restrictions on both movement and on retail operations,” Fitch said.

Authorities in Indonesia have been implementing and easing restrictions based on the number of active Covid-19 cases in the country. As of June, a nationwide public health emergency remains in effect until further notice, the report noted.

Under this policy, 50% of employees in non-essential industries can work in an office, though there are tighter curbs in areas with higher virus activity. Shopping centres and food establishments can operate through 21:00 nightly.

“Whilst central authorities have instructed local officials nationwide to enact distancing and other protocols, the enforcement level is unclear. The public activity restrictions remain in effect in all 34 provinces,” the report stated.