Jakarta (ANTARA) - Economist from the Center of Reform on Economics\n(CORE), Yusuf Rendy Manilet, believes the government needs to mitigate\neconomic challenges following the momentum of Ramadan and Eid\nal-Fitr.<\/p>\n
According to him, the performance of the first quarter of 2026 will\nindeed be strongly driven by economic activities during Ramadan and Eid\nal-Fitr. However, economic performance will normalise after this\nmomentum ends, and at the same time, the economy in general is facing\ncomplex challenges.<\/p>\n
\u201cNow the challenges are even more complex, because we are not only\ntalking about the seasonal effects that are subsiding, but also external\nand domestic pressures that could hold back future consumption,\u201d said\nYusuf when contacted by ANTARA in Jakarta on Wednesday.<\/p>\n
For the first quarter, household consumption boosted by the surge in\nspending during the Ramadan and Eid al-Fitr period will provide a solid\nfoundation for short-term economic growth.<\/p>\n
However, given that this spending acceleration is seasonal, not a\npermanent increase in purchasing power, the impetus for economic growth\nwill gradually slow down.<\/p>\n
The subsiding seasonal effects are also accompanied by external and\ndomestic pressures that could restrain future consumption, one of which\nis the potential rise in energy prices.<\/p>\n
\u201cWhen the prices of fuel oil (BBM), electricity, or global energy\nface pressure, the impact is direct on living costs and production\ncosts, thus narrowing household spending space and at the same time\nmaking business actors more cautious about expansion,\u201d explained\nYusuf.<\/p>\n
He also highlighted the risk of extreme climate events that could\ndisrupt domestic food production and drive up prices of strategic\ncommodities, such as rice and other basic necessities.<\/p>\n
Yusuf emphasised that this risk is very crucial because food\ninflation has a direct impact on people\u2019s purchasing power, especially\nfor lower-middle income groups.<\/p>\n
\u201cThis means that even though consumption was strong during Eid, its\nsustainability is very vulnerable to being eroded by a combination of\nrising energy prices and food pressures due to climate factors, so what\nwe see ahead is not just normalisation, but also the potential for real\nconsumption weakening if these price pressures are not controlled,\u201d he\nadded.<\/p>\n
From the distribution side, continued Yusuf, the impact will also\ntend to be increasingly uneven, because low-income groups will be most\naffected by rising energy and food prices, while upper groups are\nrelatively more resilient.<\/p>\n
That condition makes aggregate consumption still grow, but with\nrelatively weaker quality and a narrower base.<\/p>\n
Therefore, Yusuf opines that although Eid has successfully lifted\nfirst-quarter economic growth, that momentum now faces a fairly heavy\ntest.<\/p>\n
\u201cWithout strong purchasing power support and price stability, both\nfor energy and food, domestic consumption will struggle to become a\nsustainable growth engine, and ultimately this will also limit the\noverall pace of economic growth in subsequent periods,\u201d he stated.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/core-government-needs-to-mitigate-post-eid-economic-challenges-1774421479", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }