Indonesia's Clothing Prices Rise as Sales Volumes Fall

Prices and volumes moving in opposite directions

Indonesian shoppers paid a little more for clothing and footwear in August 2026 than they did a year earlier, but the amount they actually bought fell sharply. That combination shapes much of the retail picture at the moment: modest price growth, weaker volumes in fashion, and a consumer base that nonetheless reports growing confidence.

Clothing prices edge higher

Clothing and footwear prices rose 1.20 per cent year on year in August, up from 1.04 per cent in July, according to Statistics Indonesia (BPS). Headline consumer price inflation climbed to 3.19 per cent from 2.88 per cent over the same period, which keeps it inside Bank Indonesia’s (BI) target band of 2.5 per cent, plus or minus one percentage point.

As a result, clothing and footwear inflation sat 1.99 percentage points below the general inflation rate. Overall consumer prices rose 0.21 per cent month on month.

Core inflation, which strips out volatile food and administered prices, rose to 2.92 per cent year on year in August from 2.76 per cent in July. Looking at the monthly change, BI identified gold jewellery as the main driver of core inflation.

Real clothing sales drop on the month and the year

BI’s real sales index for clothing fell 12.4 per cent year on year in August, preliminary results of the bank’s Retail Sales Survey show. That follows a 2.8 per cent rise in July. On the month, the clothing index was down 6.7 per cent.

The comparison base explains much of the annual decline. In August 2025 the clothing index had risen 8.3 per cent, so this year’s figures were always going to be measured against an unusually strong month.

Total real retail sales told a different story. They rose 1.3 per cent year on year in August, up from 1.1 per cent in July, and were 0.8 per cent higher than in July. BI attributed the annual growth mainly to food, beverages and tobacco, as well as spare parts and accessories.

Households feel more optimistic

Consumer sentiment improved over the month. BI’s Consumer Confidence Index reached 118.5 in August, up from 116.8 in July and comfortably above the 100 mark that separates optimism from pessimism. The current economic condition index rose to 109.4 from 107.9, while the consumer expectation index moved up to 127.6 from 125.7.

A reading this far above 100 suggests that households are not in retreat, even as they rein in spending on some discretionary categories. The gap between confidence and clothing purchases is worth watching, because it often reflects uncertainty about prices and what the currency will do next, rather than a loss of faith in the economy as a whole.

Policy on hold and a steadier rupiah

BI left the BI-Rate unchanged at 5.75 per cent at its meeting on 18–19 August. The deposit facility rate stayed at 4.75 per cent and the lending facility rate at 6.50 per cent.

The rupiah strengthened slightly over the month. The dollar averaged 17,805 rupiah in August, down from 18,011 rupiah in July, according to BI data compiled by the Bank for International Settlements — a 1.2 per cent rise in the value of the rupiah. Measured against August 2025, when the dollar averaged 16,308 rupiah, the rupiah remains 8.4 per cent weaker.

For importers of garments, footwear and retail stock more generally, a currency that is stronger on the month but weaker on the year keeps cost pressures alive, even while headline inflation is contained.

What it all adds up to

The August package gives a coherent — if mixed — view of clothing and footwear. Prices rose 1.20 per cent year on year, well below headline inflation of 3.19 per cent. At the same time, BI’s real sales index for clothing fell 12.4 per cent year on year, measured against a strong August 2025 base, while total real retail sales rose 1.3 per cent. Consumer confidence improved to 118.5, and the central bank held the BI-Rate at 5.75 per cent.

In practical terms, price growth in fashion is modest but positive, volumes are volatile, and household optimism is gradually rebuilding. For anyone planning ranges, stock levels or pricing for the coming season, the useful signal is that the weaker clothing number is largely a base effect, while the broader retail and sentiment indicators point to a steady rather than shrinking consumer.

The figures above combine the most recent official data available at the time of writing. Reporting lags differ by indicator, so not every figure refers to the same month; each data point is labelled with its reference period.