Eid al-Fitr: Rising costs affect travel and tourism in Indonesia
New Delhi: The festive mood of Eid al-Fitr holidays, marking the end of the Islamic holy month of Ramzan, has been subdued in Indonesia this year as people battled the soaring prices for food, clothing and essential goods.
Spending ahead of the biggest Islamic festival, being celebrated on Monday, declined this year as compared to the last year, with a predicted slowdown in cash circulation to fewer travellers, the media reported.
Each year in Indonesia, nearly three-quarters of the population of the world’s most populous Muslim-majority country travelled for their annual homecoming, known locally as mudik, that is always welcomed with excitement.
During this time of the year, people specially pour out of the major cities to return to villages to celebrate holidays with prayers, feasts and family gatherings.
But things were different this time, as the Transportation Ministry stated that Eid travellers numbered only 146 million people, a 24 percent decline from last year’s 194 million travellers.
The weakening purchasing power was reflected in Bank Indonesia’s Consumer Confidence Index which also dipped from 126.4 in February to 127.2 in January.
Traditionally household consumption is a key driver of Indonesia’s GDP. It contributed over 50 percent to the economy last year, helping push annual growth to 5.11 percent. However, consumer spending in 2025 is expected to be more subdued.
Despite all the current scenarios the government remains optimistic that Eid momentum will support economic growth in the first quarter of 2025.
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 labour-intensive sectors.
