The Real Impact of the Asian Games towards the country’s Economy

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The 2018 Asian Games which took place in Jakarta – Palembang not only had a positive impact on the development of sports in Indonesia, but also on the economic sector in the country. Based on data released by Bank Indonesia (BI) annually (year-on-year / YoY) in August 2018, the real sales index (IPR) in the retail sales sector grew by 6.1%.

That achievement is faster than the previous month of 2.9% YoY. The August 2018 record was also able to far outperform retail sales growth in August 2018 by 2.2% YoY. Of course the increase in the value of the real sales index was able to outperform BI’s estimate. In a report last month, the central bank of Indonesia estimated retail sales to decline to 2.8% YoY.

“Increased retail sales, among others, are influenced by the number of discount programs and the implementation of major activities in August 2018, including the Asian Games and Indonesia’s Independence Day,” BI wrote, quoted from CNBC Indonesia.

For information, BI noted that the increase in retail sales performance in August was sourced from clothing that recorded a growth of 20.4% YoY, higher than the 13% YoY increase in July 2018.

In addition, other household appliances also grew by 11.8% YoY in August, after increasing “only” by 5.3% YoY in the previous month. As for the Motor Vehicle Fuel group, it was also able to grow strongly by 12.2% YoY in August, although it slightly slowed from a 15.4% YoY increase in the previous month.

“The stable growth in retail sales in August was driven by sales performance in the clothing and motorized fuel commodity groups”, BI wrote.

However, in September 2018, BI predicted clothing commodity group to grow by 28.1% YoY, an increase from 20.4% YoY in August 2018. Furthermore, sales of the Motorized Fuel group was estimated to increase by 19.5% YoY, also better than 12, 2% YoY in August 2018.

On the other hand, the slowdown in September is expected to be driven by the contraction in the sales of the Information and Communication Equipment group by 22% YoY, worse than the minus 13.2% YoY in August. Not only that, the sales growth of the Food, Beverage and Tobacco group will also slow to 6.5% YoY, from August 8.1% YoY.

Based on a survey conducted by BI to a number of respondents, the forecast of a decline in sales was partly due to a decrease in demand due to the weakening of the rupiah exchange rate, especially for commodity groups Information and Communication Equipment and Other Household Equipment.

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