Optimism for Consumption Growth and Retail Sales During Ramadan & Eid 2025

As Ramadan and Eid al-Fitr approach, household consumption is expected to increase significantly. This trend has fueled optimism among retailers, who aim to achieve sales of up to IDR 75 trillion during this period.

The rise in consumption is supported by various promotional programs, including the Friday Mubarak discount campaign, which runs throughout Ramadan until March 31, 2025. Additionally, the “Belanja di Indonesia Aja” (BINA) Lebaran program, initiated by HIPPINDO and APPBI, along with the Ramadan Bazaar and Eid Sale by idEA, is also expected to boost retail sales.

Chairman of the Indonesian Retailers Association (Aprindo), Solihin, expressed confidence in the continued strength of consumption growth. He emphasized that the promotional programs being implemented would serve as key drivers of domestic spending.

In the previous year, household consumption during Ramadan and Eid in March and April 2024 grew by 4.91% year-on-year (yoy), contributing 54.93% to GDP. The highest growth was recorded in the transportation, communication, restaurant, and hospitality sectors.

Coordinating Minister for Economic Affairs, Airlangga Hartarto, stated that the Friday Mubarak and BINA Lebaran programs are expected to enhance consumer purchasing power. Meanwhile, Minister of Trade Budi Santoso targets BINA Lebaran to contribute IDR 30 trillion to total retail transactions during the holy month.

According to Segara Institute Executive Director Piter Abdullah, increased consumption during Ramadan and Eid is a well-established historical trend. However, this year, consumption growth is expected to be lower than the previous year due to weakening purchasing power. Contributing factors include rising unemployment and low inflation at the start of the year.

The Central Statistics Agency (BPS) recorded a monthly deflation of 0.76% in January 2025, with annual inflation at only 0.76%. This was largely due to government policies, such as electricity tariff discounts, which helped curb inflation early in the year.

Head of the Macro and Financial Center at Indef, Rizal Taufikurahman, projects that household consumption during Ramadan and Eid 2025 will reach IDR 1.188 trillion, driven by the disbursement of holiday bonuses (THR) and the 13th salary for civil servants. However, he also warned that the surge in demand could trigger seasonal inflation, particularly in essential goods and energy sectors.

From a retail perspective, HIPPINDO Chairman Budihardjo Iduansjah urged the government to provide stimulus to both the retail and manufacturing industries to ensure optimal consumption growth. He also emphasized the need for long-term policies to sustain spending beyond seasonal trends.

To support this, the government has introduced various incentives, including airfare and toll discounts, free homecoming travel programs, and market operations to stabilize basic commodity prices. Airlangga Hartarto hopes that an additional shopping season between April and the end of the year will further boost domestic consumption.

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