Jakarta, CNBC Indonesia - Ramadan and Eid al-Fitr are always\nsynonymous with a surge in spending among Indonesian households. During\nthis period, household consumption typically reaches its annual peak,\ndriven by high demand for food, clothing, transportation, homecoming\ntrips, and various other seasonal expenses.<\/p>\n
This year, the trend was evident once again. In fact, consumer\nspending during Ramadan 2026 was recorded as stronger than the previous\nyear.<\/p>\n
According to the Focal Point Report from BCA Economic & Industry\nResearch, the BCA Consumer Spending Index peaked in 2026 at 132.7.<\/p>\n
This figure is higher than the Ramadan 2025 peak of 129.8 but lower\nthan 2024\u2019s 134.2. BCA also assessed that this year\u2019s consumption peak\narrived earlier and lasted longer than in the two preceding years.<\/p>\n
At first glance, this data signals positivity, indicating that\nhousehold consumption remains robust enough to support economic growth\nin the first quarter of 2026.<\/p>\n
However, behind this surge, there are warning signals to heed. The\nhigh consumption during this year\u2019s Ramadan is suspected not to be\nentirely driven by rising household incomes, but rather by households\nincreasingly relying on savings to maintain elevated spending\nlevels.<\/p>\n
High Consumption Supported by Savings<\/p>\n
The strengthening of consumption during this year\u2019s Ramadan does not\nfully reflect healthy purchasing power.<\/p>\n
In its report, BCA noted that the increase in consumer transactions\nlast month appeared to be preceded by a decline in the saving rate,\nsuggesting that consumption was more supported by reductions in\nhousehold financial buffers rather than stronger income growth.<\/p>\n
Indications are evident from the decreasing share of household\nownership in financial assets and mutual funds.<\/p>\n
In government securities (SBN), the portion fell from 12.3% to 11.8%\nin March 2026. Meanwhile, in equities or stocks, the portion dropped\nmore sharply from 18.0% to 16.6%.<\/p>\n
The slowdown in purchases of paper assets indicates that households\nare allocating more of their existing resources to consumption needs\nduring Ramadan.<\/p>\n
In other words, the public did indeed spend generously during this\nyear\u2019s Ramadan and Eid al-Fitr, but part of that spending is believed to\nhave been financed by drawing down savings reserves. This makes the\nseemingly strong consumption on the surface leave major questions about\nits sustainability after Eid has passed.<\/p>\n
Because when savings have already been used to support seasonal\nspending, the room for spending in subsequent months risks\nnarrowing.<\/p>\n
This situation also points to the potential for front-loading\nconsumption, where households advance their spending to the Ramadan\nperiod. The risk of this pattern is the emergence of a consumption\ncorrection after Eid ends.<\/p>\n
In the report, BCA stated that the moderation in consumer\ntransactions post-Eid this year is still appearing better than in\nprevious years, but it continues to show that after the consumption peak\nhas passed, household spending begins to taper off.<\/p>\n
On Eid day itself, the 2026 consumption index fell to 49.3, higher\nthan 42.0 in 2025, then recovered to 69.4 afterwards. Although better\nthan the previous year, the pattern still illustrates that post-peak\nconsumption begins to adjust.<\/p>\n
This means that the strength of Ramadan 2026 consumption does not\nautomatically signify a genuine improvement in household finances. On\nthe contrary, there is a risk that the public has already \u201cgone all out\u201d\nin spending during Eid, thereby limiting the driving force of future\nconsumption.<\/p>\n
Threats Looming on the Horizon<\/p>\n
Household consumption issues do not end with thinning savings.\nForward risks are even greater, particularly from the global oil price\nsurge, inflationary pressures, and the possibility of adjustments to\nsubsidised fuel prices.<\/p>\n
Oil prices once touched US$116.37 per barrel, a 49.7% jump since the\nIran war broke out.<\/p>\n
This increase poses a threat to Indonesia as it can pressure\ngovernment finances while also driving up living costs for the\npublic.<\/p>\n
At the same time, there are risks from food inflation. The government\nhas signalled a potential annual decline in wet paddy harvest area of\n3.87%. If supplies are disrupted, food prices will be harder to control,\nand public purchasing power could be further squeezed.<\/p>\n
The most sensitive threat still comes from the possibility of\nadjusting subsidised fuel prices.<\/p>\n
A moderate increase of 10-15% is estimated to add around 1.8-2.2% to\ninflation. In a situation where household savings are already eroded,\nsuch rises in living costs will clearly further constrict household\nspending room.<\/p>\n
The government is still endeavouring to avoid this scenario through\nbudget efficiency and spending reallocation.<\/p>\n
However, if subsidy pressures continue to grow, fiscal\nmanoeuvrability will become more limited. Ultimately, after the Ramadan\nconsumption peak has passed, the biggest challenge is to prevent\nhousehold spending from declining too sharply.<\/p>\n
CNBC INDONESIA RESEARCH<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/indonesian-households-go-all-out-during-eid-wallets-already-exhausted-1775641900", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }