JAKARTA: Ramadan and Idul Fitri have passed, and consumer spending during this year’s Muslim holiday season was quite good, although not as high as in 2024.
Overall, this trend is reflected in the household consumption component of gross domestic product for the first quarter of 2025, which grew 4.89% year-on-year, slightly lower than the 4.91% growth recorded in 2024.
The general mood during Ramadan-Idul Fitri 2025 was more cautious.
After the festive period, consumer spending usually enters a normalisation phase characterised by a slowdown.
Using data from the Mandiri Spending Index (MSI), this pattern occurs repeatedly and consistently.
In 2023 and 2024, the average decline in spending during the normalisation phase compared with the holiday peak was around 8.67%.
The same happened this year, with average spending declining after the holiday peak around 7.34%.
Based on our observation, the normalisation period in 2025 was not as deep as in previous years.
What made the difference were the holidays and collective leave days after the festive season in 2025.
Historically, holidays and collective leave days have been key drivers of increased consumer spending.
MSI data showed that spending during holiday periods increased 14.4% on average compared to normal (non-holiday) periods. While the impact varies depending on holiday characteristics, such as timing and length, some patterns stand out.
Generally, consumer spending increases significantly during holidays that fall at the beginning or the end of the month, compared with holidays in the middle of the month.
Holidays at the beginning or the end of the month lead to an 11.5% increase in spending, while mid-month holidays result in only a 2.6% increase.
This is likely tied to payday for formal employees in Indonesia, which usually comes at the end of the month.
So, holidays close to a payday boost people’s appetite for travel and spending, since their finances are stronger.
On the other hand, holidays that fall mid-month are often used for resting at home, coinciding with generally lower financial capacity. — The Jakarta Post/ANN
