Post-Eid Economy Slows While Global Tensions Add New Pressure

Mohammad Nur Rianto Al Arif
(Professor at UIN Syarif Hidayatullah,
Secretary General of the Indonesian Lecturers Association,
Board Member of IAEI,
Board Member of ISEI Jakarta Chapter)

Ramadan always brings a different pulse to Indonesia’s economic life. It is not just a religious moment but also an annual economic event with a strong impact on consumption, income distribution, and production activities.

During this period, the economic rhythm moves faster. Shopping centers are crowded, traditional markets stay active until late at night, and transportation routes are packed with homecoming travelers moving from cities to villages.

However, like a wave that reaches its peak, the euphoria does not last long.

After Eid al-Fitr, the economy enters a calmer phase, or in many cases, it tends to slow down.

Consumption begins to decline, business activity returns to normal, and people’s purchasing power adjusts.

This year, that phase has become more complex as it unfolds amid rising global uncertainty, particularly due to the escalating conflict involving the United States, Israel, and Iran.

In this context, Indonesia’s post-Ramadan economy is no longer just about seasonal cycles but also about how national economic resilience is tested by stronger external pressures.

Ramadan and Eid al-Fitr remain the main drivers of domestic consumption. In Indonesia’s economic structure, household consumption contributes more than half of the gross domestic product (GDP).

This means that any increase in consumption directly affects national economic growth.

During Ramadan, consumption rises across all segments of society. Food demand increases, clothing purchases surge, and social activities such as communal iftar and the distribution of zakat, infaq, and alms further boost money circulation.

The peak occurs before Eid, when holiday allowances (THR) are distributed and people prepare for the celebration.

This momentum reaches its climax in the homecoming tradition. Hundreds of millions of people travel from cities to their hometowns, bringing significant financial flows with them.

Data shows the scale of this phenomenon is massive. During the 2025 Eid homecoming season, around 146.48 million people traveled, or about 52 percent of Indonesia’s population.

This number was lower than in 2024, which reached 193.6 million, but still reflects the enormous mobility during Eid.

In 2026, the number is projected to slightly decrease by about 1.7 percent to 143.9 million people.

Money circulation during this period reaches hundreds of trillions of rupiah, creating wide and layered economic effects.

In 2024, circulation during Ramadan and Eid was estimated at Rp157.3 trillion.

In 2025, it ranged between Rp137 trillion and Rp145 trillion. In 2026, it is projected to reach Rp190 trillion.

In regions, the impact is significant. Traditional markets become more crowded, food stalls are filled with customers, and small businesses experience a surge in revenue.

The transportation and tourism sectors also benefit from high demand. In a short time, local economies that usually move slowly become highly dynamic.

This phenomenon is often seen as economic redistribution from cities to rural areas. For a moment, spatial inequality appears to narrow.

Money that usually circulates in major economic centers flows into regions, providing direct stimulus to local communities.

However, this distribution is temporary. After the return flow ends, regional economies go back to normal.

Most of the money spent during Eid is used for short-term consumption, not long-term productive investment.

This is where the paradox appears. Ramadan shows how strong consumption is in driving the economy. At the same time, it highlights the limitation of an economic structure that still relies on consumption rather than production.

After Eid, Indonesia enters a normalization phase. In theory, this is a normal seasonal cycle.

But in practice, it often feels like a slowdown. One key factor is declining purchasing power.

During Ramadan, household spending rises significantly. Many families allocate most of their income, even savings, for consumption.

Afterward, spending capacity becomes more limited.

This is reinforced by the loss of seasonal stimuli like THR and bonuses. Without extra liquidity, household consumption declines.

Sectors that previously surged—retail, transportation, tourism—return to normal levels, or even below average.

At the macro level, this is reflected in weakening growth after the first quarter. In other words, growth driven by Eid consumption is not always sustainable.

This year’s post-Ramadan challenge is not only domestic. The world is facing rising global uncertainty, partly driven by geopolitical conflict in the Middle East. The escalation involving the United States, Israel, and Iran has had major global economic impacts. The Middle East is a key global energy hub. Conflict there directly affects energy markets.

Oil prices have surged above USD 110 per barrel and could reach USD 220 if the conflict continues. Disruptions to energy infrastructure and threats to key routes like the Strait of Hormuz increase concerns over global supply. For Indonesia, this has serious implications. Although it produces energy, Indonesia still depends on imported oil.

Higher oil prices increase import costs. The first impact is on the state budget (APBN). Rising oil prices increase energy subsidy burdens. The government faces a difficult choice: increase subsidies or raise fuel prices. Increasing subsidies pressures fiscal stability, while raising prices risks inflation and reduced purchasing power.

The second impact is inflation. Higher energy prices raise production and distribution costs. This leads to higher prices for goods and services, including basic needs. Post-Ramadan, this becomes more severe as purchasing power is already weakened.

The third impact is pressure on exchange rates and financial markets. Global uncertainty drives capital toward safer assets, reducing flows to emerging markets.

This weakens the rupiah and increases market volatility. Combined, domestic and global factors create an unfavorable economic situation. Consumption weakens, while inflation rises.

This resembles stagflation—a slowdown in growth with high inflation—though not yet extreme. The middle class, a key driver of consumption, is particularly affected. When income stagnates and prices rise, purchasing power erodes. Amid these challenges, digital economy growth offers some hope.

Digital transactions have surged, especially during Ramadan. E-payments, e-wallets, and e-commerce usage have increased significantly. For small businesses, digitalization expands market access. However, digitalization alone is not enough. Without strong production and industrial capacity, growth remains fragile.

Ultimately, Ramadan reveals deeper structural issues. Indonesia’s economy still relies heavily on consumption. While important, consumption alone creates vulnerability. Productive sectors—manufacturing, exports, and long-term investment—are not yet dominant.

Looking ahead, the challenge is turning Ramadan momentum into sustainable growth. Large money circulation should support productive activity.

MSMEs must improve capacity and quality. Industrial strengthening is key. Reindustrialization and downstreaming must continue. Energy resilience must also be strengthened through diversification and renewables. Macroeconomic stability must be maintained through fiscal and monetary policy.

In the end, the post-Ramadan economy is about managing the transition from euphoria to reality. Ramadan provides a boost, but the real test comes after. Indonesia cannot rely on seasonal cycles forever. It must build a stronger economic foundation based on production, innovation, and resilience.

Ramadan should not only be seen as a consumption moment but also as an opportunity for transformation. Amid global uncertainty, one thing is clear: after Ramadan ends, the real economic work begins.

Indonesia must not only celebrate short-term growth but also build long-term resilience.

Thus, every Ramadan should become not only a peak of consumption but also a stepping stone toward a stronger, more inclusive, and sustainable economy.

This article was published in KOMPAS on Tuesday, March 24, 2026.