Indonesia's retail sales are expected to remain stable in May despite a monthly decline, supported by demand during several religious holidays.
On a month-on-month basis, retail sales are forecast to decline 0.9% in May, improving from the 11.6% contraction recorded in April, according to data released by Bank Indonesia on Thursday.
The country's Real Sales Index is projected at 225 in May, with annual growth driven mainly by sales of spare parts and accessories, other household equipment, and miscellaneous goods.
"In terms of prices, inflationary pressure over the next three months, namely July 2026, is forecast to remain relatively stable whilst over the next six months, namely October 2026, it is forecast to rise," Bank Indonesia said.
The central bank attributed the improved monthly performance to holiday-related demand during the Ascension Day, Eid al-Adha, and Vesak periods.
The retail sales data comes as Bank Indonesia continues to balance support for domestic demand with efforts to maintain currency stability.
In a rare move outside its regular policy schedule, the central bank raised its benchmark interest rate by 25 basis points earlier this week, saying the currency had weakened more than anticipated and that additional tightening was needed to preserve stability.
The move also came as inflationary pressures showed signs of building.
Indonesia's consumer prices rose 3.08% year over year in May, accelerating from 2.42% in April and topping economists' expectations of 2.97%, according to a Reuters poll.
Attention now turns to next week's policy meeting, with the rupiah under mounting pressure after sliding about 8% this year and 7% since the Iran conflict erupted, leaving it among the world's weakest-performing currencies.
