6 Economic Facts for Indonesia Ahead of Eid: Some Alarming, Some Reassuring
Jakarta, CNBC Indonesia - Indonesia’s economic conditions ahead of Eid 2026 show a varied landscape.
Indonesian Muslims will celebrate Eid al-Fitr on different days, with some on Friday (20/3/2026) and others on Saturday (21/3/2026). Eid is a blessing for Indonesia as it serves as one of the key drivers of the economy from cities to villages.
Ahead of Eid, several economic indicators present differing signals.
On one hand, national economic growth in the early part of the year is projected to improve, supported by rising domestic demand during Ramadan and leading up to Eid al-Fitr. Consumer confidence remains in optimistic territory, while retail sales are beginning to rise in line with increased shopping activity among the public.
On the other hand, inflationary pressures are rising sharply, the rupiah is still on a weakening trend, and global uncertainty is heightening again due to the war in the Middle East. Therefore, Indonesia’s economic conditions ahead of this year’s Eid still need to be read carefully, particularly regarding purchasing power, price stability, and external resilience.
Here are some of the latest economic indicators ahead of Eid 2026.
- Economic Growth
Indonesia’s economic growth conditions are still showing fairly good resilience ahead of Eid 2026. Based on data from the Central Statistics Agency (BPS), the Indonesian economy grew by 5.11% throughout 2025, higher than 5.03% in 2024. Meanwhile, in the fourth quarter of 2025, the economy grew by 5.39% year-on-year. This achievement provides a strong initial foundation for entering 2026.
Bank Indonesia also assesses that Indonesia’s economic growth in the first quarter of 2026 will increase, primarily supported by domestic demand. Household consumption is projected to rise in line with heightened demand related to the National Religious Holiday (HBKN), supported by the disbursement of Eid Allowance (THR), government social spending, and various other incentives.
In addition to consumption, investment is also expected to remain solid. Bank Indonesia (BI) sees investment still driven by the acceleration of government investment, including through the Red and White Village/Urban Cooperative (KDKMP) and Danantara investment. This means that ahead of this year’s Eid, the domestic economy is still boosted by two main engines: household consumption and investment.
Nevertheless, Bank Indonesia warns that the deteriorating global economy and financial markets due to the war in the Middle East must still be anticipated. Therefore, policy synergy between the government, Bank Indonesia, and other stakeholders continues to be strengthened to keep national economic growth within the range of 4.9%-5.7%.
- Inflation
Inflationary pressures are one of the most prominent indicators ahead of Eid 2026. The Central Statistics Agency recorded inflation of 4.76% year-on-year in February 2026. This increase indicates that price pressures are now much higher compared to the low inflation phase last year.
Bank Indonesia explains that the high inflation in February 2026 is mainly influenced by temporary factors, namely the base effect from the 50% household electricity tariff discount policy in January and February 2025. Thus, the current annual inflation surge does not entirely reflect widespread price increases but is also affected by the low comparison base from the previous year.
On the other hand, core inflation remains relatively stable at 2.63% year-on-year. This shows that price pressures from core demand have not surged excessively. Meanwhile, volatile food group inflation was recorded at 4.64% year-on-year, but is still considered fairly contained amid rising demand during the Chinese New Year and Ramadan periods, as well as supply disruptions due to weather factors.
Looking ahead, Bank Indonesia views that CPI inflation in 2026 and 2027 will remain within the target range of 2.5±1%, though higher than previous estimates due to prospects of rising global commodity prices. Ahead of Eid, this situation is important to monitor because public consumption typically surges sharply, especially for food, beverages, clothing, and transportation.
- Rupiah Exchange Rate
From the financial market perspective, the rupiah exchange rate against the US dollar remains weak ahead of Eid. At the close of trading on Tuesday (17/3/2026), the rupiah was at Rp16,975/US.Althoughitstrengthenedslightlyby0.06.
The rupiah’s movement is inseparable from the rising global uncertainty due to the war in the Middle East.
Bank Indonesia notes that in March 2026, portfolio investment experienced net outflows of US$1.1 billion, triggered by heightened uncertainty in global financial markets. This shows that pressure on the rupiah has not truly dissipated, as global sentiment remains highly dominant.
Nevertheless, Indonesia’s external resilience is still relatively maintained. Bank Indonesia records that capital and financial flows in January-February 2026 cumulatively still posted net inflows of US$1.6 billion, mainly supported by inflows into Bank Indonesia Rupiah Securities (SRBI). Additionally, foreign exchange reserves at the end of February 2026 also remain strong at US$151.9 billion, equivalent to 6.1 months of imports or 5.9 months of imports and government external debt payments.
This means that although the rupiah is still under pressure, Indonesia still has sufficient external buffers. However, rising global oil prices and slowing world economic prospects still need attention as they could widen the current account deficit.
- BI Interest Rate
Bank Indonesia has just decided to hold its benchmark interest rate again in the results of the Board of Governors’ Meeting (RDG) announced on Tuesday (17/3/2026). BI decided to maintain the BI-Rate at 4%.