JakartaPost-Mar 18
The annual spending surge during Idul Fitri, typically supported by the mass exodus to hometowns (mudik) and holiday allowance (THR) payouts, may lose momentum this year as weaker mobility and more cautious households dampen consumption. The Transportation Ministry estimates that only 143.91 million people will travel during the Idul Fitri exodus this year, a 6.55 percent decline from the 154 million recorded in 2025. At the same time, the disbursement of THR, another key pillar of the Ramadan economy, is progressing but remains uneven across worker groups. A survey by Litbang Kompas, the research arm of Kompas daily, conducted from March 6 to March 10, showed that only 27 percent of workers, primarily civil servants (ASN), had received THR at the time. Meanwhile, more than a third of private-sector respondents had yet to receive it, and 23.4 percent had not been paid despite being informed they would. Current regulations stipulate that THR must be paid no later than seven days before Idul Fitri, which is expected to fall on either March 20 or March 21. The delay has affected Baihaqi, a Gen Z startup employee, who has yet to receive his allowance after the deadline. He noted that his financial priorities have changed compared to previous years, driven by rising bills and a more cautious outlook on the economy and labor market. Even without geopolitical pressures in the Middle East, he added, his personal spending had already been restrained over the past six months. Another millennial worker, Andira, said she chose to allocate all of her THR this year toward savings and gold investment, rather than spending on festive consumption. “In previous years, I usually split it around 70-30 or 80-20 between saving and spending, but this year I invested everything. I put all of my THR into gold because it feels like the safest option amid the current uncertainty,” she told the Post on Monday. Institute for Development of Economics and Finance (INDEF) economist Hakam Naja warned that rising inflation, alongside a weakening rupiah, has pushed up the prices of imported goods such as food and fuel, further eroding household purchasing power. Statistics Indonesia (BPS) reported that the consumer price index (CPI) rose 4.76 percent year-on-year in February, compared with a 3.55 percent annual increase in the previous month. “Spending power is weakening amid uncertain global economic and political conditions, which, along with broader socioeconomic factors, have clearly contributed to the decline in mudik flows,” he said in a statement on Monday. Read more at:
