Researchers at the Macroeconomic and Finance Centre of the Institute\nfor Development of Economics and Finance (Indef), Abdul Manap Pulungan,\nview the Ramadan and Iledul Fitri period as a crucial moment for\nIndonesia\u2019s national economy, as it has the potential to boost consumer\nactivity.<\/p>\n
According to him, increased consumption is typically driven by the\ndisbursement of holiday bonuses and increased population mobility during\nthe migration season.<\/p>\n
\u201cThe Iledul Fitri moment is one of the most important moments each\nyear as it presents both opportunities and challenges for the economy.\nFrom the demand perspective, Ramadan and Iledul Fitri typically drive\nincreased consumption, particularly from holiday bonuses and migration\nactivities,\u201d he stated at a public discussion forum titled \u201cIledul Fitri\nEconomy Amid War Turmoil\u201d held online on Monday (9 March).<\/p>\n
He noted that increased consumption is expected to drive business\nactivity, particularly among micro, small, and medium enterprises\n(MSMEs), thus raising production capacity and increasing money\ncirculation among the public.<\/p>\n
\u201cWe hope this activity can spur MSMEs to move and expand their\nproduction capacity, which will ultimately affect the volume of money in\ncirculation during the Ramadan and Iledul Fitri period,\u201d he said.<\/p>\n
However, Pulungan also noted that this momentum is typically\naccompanied by challenges that occur almost every year, particularly\nrising inflation ahead of Ramadan and Iledul Fitri.<\/p>\n
\u201cThe challenge we frequently face is rising inflation, particularly\nin the food commodities group due to limited food stocks. This is a\nrecurring problem but has not been resolved fundamentally,\u201d he\nstated.<\/p>\n
Beyond food price pressures, he assessed that global factors also\npotentially affect price stability domestically, particularly through\nimpacts on energy prices.<\/p>\n
According to him, inflation stemming from government-administered\nprices also demonstrates considerable pressure.<\/p>\n
\u201cLooking at February\u2019s inflation, administered price inflation had\nalready reached approximately 12 per cent,\u201d he noted.<\/p>\n
He also highlighted other challenges for those undertaking migration\ntravel, such as infrastructure conditions, fuel prices, and potential\ncongestion that could increase travel costs.<\/p>\n
\u201cInfrastructure challenges such as fuel, road conditions, and\ncongestion can add extra costs for migrants. Funds that should be used\nfor consumption could instead be absorbed by unexpected expenses,\u201d he\nsaid.<\/p>\n
Additionally, disasters such as flooding can influence household\nspending allocation, including the use of holiday bonuses received ahead\nof Iledul Fitri. In the current year\u2019s situation, Pulungan assessed that\neconomic challenges become more complex as Ramadan occurs amid global\neconomic pressures.<\/p>\n
\u201cConditions this year are somewhat different because Ramadan and\nIledul Fitri are occurring when the global economy is experiencing\nstress. This will affect the rupiah exchange rate and ultimately impact\ndomestic inflation,\u201d he said.<\/p>\n
He explained that a combination of food inflation, energy inflation,\nand rupiah currency depreciation potentially increases import inflation\nand constrains household purchasing power.<\/p>\n
According to him, these conditions raise the question of whether\nadditional income from holiday bonuses can genuinely boost purchasing\npower or merely offset inflationary impacts.<\/p>\n
\u201cThe hypothesis is whether the additional holiday bonus received by\nsociety can truly increase purchasing power or merely prevents inflation\nfrom eroding it,\u201d he stated.<\/p>\n
He added that inflationary pressures from multiple sources\u2014both\nsupply and demand-side\u2014make the potential for increased consumption\nduring Ramadan and Iledul Fitri suboptimal.<\/p>\n
\u201cWhen inflation comes from multiple sources such as food, energy,\ninfrastructure, and exchange rates, then the additional holiday bonus\nthat society receives will be difficult to maximise for boosting\nconsumption,\u201d Pulungan explained.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/indef-ramadan-and-iledul-fitri-present-economic-opportunities-but-overshadowed-by-inflationary-pressures-1773053546", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }