Tuesday, April 1, 2025

Soaring Prices and Fewer Travelers Impact Eid al-Fitr Celebrations in Indonesia: What you need to know

- Travel and Tour  World


Indonesia’s Eid al-Fitr holiday, marking the end of the Islamic holy month of Ramadan, has been notably subdued this year, with soaring prices for food, clothing, and essential goods dampening the festive mood. This decline in consumer spending has been attributed to the ongoing economic strain, which has led to fewer travelers and lower cash circulation compared to the previous year.

Every year, Indonesia sees a mass migration of nearly three-quarters of its population, with millions of people traveling home for the annual “mudik” or homecoming tradition.

The holiday is typically marked by celebrations that include prayers, feasts, and family gatherings.

However, this year, the Transportation Ministry reported a 24% drop in travelers, with only 146 million people making the journey, compared to 194 million last year.

The Indonesian Chamber of Commerce and Industry (Kadin) forecasted that money circulation during Eid would reach 137.97 trillion rupiah ($8.33 billion), down from 157.3 trillion in 2024. This slowdown in spending reflects the country’s broader economic challenges, with rising prices and declining purchasing power affecting many families. Bank Indonesia’s Consumer Confidence Index also showed a dip to 126.4 in February, down from 127.2 in January, signaling reduced consumer optimism.

Bhima Yudistira, executive director of the Center for Economic and Law Studies (Celios), noted that the weakening economy, combined with currency depreciation and mass layoffs in the manufacturing sector, has significantly impacted consumer spending. “These trends have weakened corporate earnings and workers’ incomes, further suppressing consumer demand,” Yudistira explained. “This has led to a less vibrant festive season, as many families prioritize basic survival over holiday celebrations.”

Typically, household consumption accounts for more than 50% of Indonesia’s GDP, driving the economy and contributing to growth. However, consumer spending in 2025 is expected to remain subdued, further challenging the nation’s economic recovery. Despite these challenges, the government remains optimistic about the economic impact of the holiday period, which usually boosts spending and stimulates economic activity.

Chief Economic Affairs Minister Airlangga Hartarto expressed hope that government initiatives to support economic growth will offset the downturn. These measures include 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.

Despite these efforts, the economic strain is felt in households across the country. For example, Endang Trisilowati, a mother of four, shared how her family had to scale back their Eid celebrations due to financial hardship. “We used to cook a variety of dishes and invite neighbors over, but now we can only afford a simple meal for our family,” Trisilowati said.

While the festive spirit is certainly impacted by economic pressures, the government hopes that these initiatives will sustain consumer spending and support economic stability throughout the year.

  

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