JAKARTA – This year, the usual joyful atmosphere of the Eid al-Fitr holiday in Indonesia seems to be more restrained due to the high prices of food, clothing, and other necessities. The increasing costs have made it challenging for people to fully embrace the spirit of the holiday marking the end of Ramadan, the Islamic holy month.
Consumer spending has taken a hit leading up to the significant Muslim holiday celebrated in Indonesia on Sunday, resulting in a decrease compared to previous years. This slowdown is attributed to reduced cash flow caused by fewer individuals traveling during this period.
Traditionally, Indonesia witnesses a surge in travel activities known as “mudik” before Eid al-Fitr, with approximately three-quarters of the country’s population, the largest Muslim population globally, partaking in this annual tradition. This year, however, the enthusiasm surrounding this customary journey seems to have dampened.
People pour out of major cities to return to villages to celebrate the holiday with prayers, feasts and family gatherings. Flights are overbooked and anxious relatives weighed down with boxes of gifts form long lines at bus and train stations for the journey
But this year the Transportation Ministry said Eid travelers reached 146 million people, a 24% drop from last year’s 194 million travelers.
The Indonesian Chamber of Commerce and Industry projects that money circulation during Eid will reach 137.97 trillion rupiah ($8.33 billion), down from 157.3 trillion last year. The weakening purchasing power is also reflected in Bank Indonesia’s Consumer Confidence Index which dipped to 126.4 in February from 127.2 in January.
Bhima Yudistira, executive director of the Center for Economic and Law Studies, or Celios, said those trends indicate the economy is under strain, driven by economic hardship, coupled with currency depreciation and mass layoffs in manufacturing.
“These have weakened both corporate earnings and workers’ incomes that suppress consumer spending,” Yudistira said, adding he “expects a less vibrant festive season.”
He said the festive spirit has been stifled by harsh economic realities, as soaring prices and dwindling incomes force residents to prioritize survival over celebration.
Traditionally household consumption is a key driver of Indonesia’s GDP. It contributed over 50% to the economy last year, helping push annual growth to 5.11%. However, consumer spending in 2025 is expected to be more subdued, Yudistira said.
Despite the downturn, the government remains optimistic that the Ramadan and Eid momentum will support economic growth in the first quarter of 2025.
“Eid usually boosts the economy through increased spending,” Chief Economic Affairs Minister Airlangga Hartarto said ahead of the Islamic holiday.
The government recently introduced incentives to stimulate economic activity, including airfare and toll road fee discounts, nationwide online shopping events, direct cash assistance for 16 million households, electricity bill reductions for low-consumption customers, and tax exemptions for labor-intensive sectors.
“With these programs in place, the government hopes to sustain consumer spending and support economic stability,” Hartarto said.
The situation has also affected Endang Trisilowati, a mother of four, who said her family had to scale down their festivities budget.
“Honestly, the economic hardship is affecting us,” Trisilowati said. She described how she used to cook different dishes every Eid and invite neighbors, but now she can only afford a simple meal for her family.
“Many have resorted to just finding a way to eat on that festivity, but the spirit is low,” she said.
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