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Businesses in Indonesia see tepid economic boost during this year’s Idul Fitri

The government has dismissed a suggestion that less money circulated during Idul Fitri this year compared to previous years.

Aditya Hadi

Aditya Hadi

The Jakarta Post

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People shop at Tanah Abang Market in Jakarta on March 6, 2025. Buying new clothes is a common tradition among Muslims to celebrate Eid al-Fitr, which marks the end of the holy month of Ramadan. PHOTO: AFP

April 3, 2025

JAKARTA – Shinta Kamdani, chairwoman of the Indonesian Employers’ Association (Apindo), has said this year’s Idul Fitri did not bring the usual surge in economic growth, despite the holiday traditionally driving a spike in spending as millions travel to their hometowns.

“There may be an increase, but it won’t be as significant as usual. [The boost] will be lower than last year,” she said on Tuesday, as quoted by bisnis.com.

She pointed to data from the Transportation Ministry showing that the number of travelers making the annual mudik (exodus) is expected to drop by 24 percent, from 193.6 million last year to just 146.5 million this year.

Still, some sectors, including transportation, hospitality, as well as food and beverages, have seen a lift in demand, though not at the usual levels. Shinta also commended the government for offering incentives, such as airfare discounts, to help stimulate spending.

“Even though it’s not as strong as in previous years, we are still making efforts to boost economic growth through promotions and sales,” she added.

Read also: Reduced holiday travel seen to slash Idul Fitri boon for regions this year

The Indonesian Chamber of Commerce and Industry (Kadin) previously predicted a 12.3 percent drop in money circulation during this year’s Idul Fitri holiday compared to last year’s festive season.

“Last year, we estimated that Idul Fitri would drive Rp 157.3 trillion [US$9.3 billion] in money circulation. This year, we expect only Rp 138 trillion,” Kadin’s deputy chair for regional autonomy, Sarman Simanjorang, said on March 18, as quoted by Kompas.

He attributed the decline to several factors, including the short gap between the New Year and Idul Fitri holidays, which are just three months apart this year.

Additionally, many households are bracing for major expenses in June when the new school year begins, while others are grappling with job losses and reduced spending power.

Read also: Airlangga downplays rupiah’s brief plunge to multiyear low

Coordinating Economic Minister Airlangga Hartarto has dismissed a suggestion that less money was circulating during Idul Fitri this year compared to previous years.

“It’s moderate. Last year, we were having the presidential and legislative elections, so it’s different,” he said on March 26.

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