Government: Eid al-Fitr Homecoming as a Consistent Instrument for Strengthening the Economy
JAKARTA, KOMPAS.com - The momentum of Eid al-Fitr homecoming represents a strategic economic phenomenon that consistently drives an increase in national economic activity.
Its mass-scale, scheduled nature, and multiplier effect make mudik a driver of various real sectors simultaneously.
Based on historical data, household consumption rises by 15–20 per cent compared to normal months, in line with high societal mobility and increased velocity of money.
The high Marginal Propensity to Consume (MPC) among Indonesians during this period further strengthens consumption impulses, including income increases for local UMKM actors by 50–70 per cent.
“Every expenditure by homecomers creates a multiplier effect that delivers layered impacts for economic actors, including UMKM, traders, and the transportation services sector. This increased activity also contributes to rises in income from the trade and services sectors. With such great potential, policy synergy and strengthening the role of UMKM are key to optimising the Lebaran homecoming momentum to drive inclusive and sustainable economic growth,” he explained in an official statement on Saturday (21/3/2026).
For the 2026 Eid al-Fitr momentum, projections for economic activity show an optimistic trend and are expected to increase compared to the previous year.
The evaluation of Eid al-Fitr 2025 recorded societal movement reaching 154.62 million people.
Societal movement and spending in 2026 are hoped to increase further to support the annual economic growth target of 5.5-5.6 per cent year-on-year (yoy).
This optimism is supported by various stimulus policies, including fiscal stimulus allocation of more than Rp12.8 trillion, distribution of social assistance worth Rp11.92 trillion to 5.04 million Beneficiary Families (KPM) ahead of Eid al-Fitr, and transport fare discounts valued at Rp911.16 billion.
With household consumption contributing around 53–54 per cent to Gross Domestic Product (GDP), these various stimuli are projected to deliver positive impacts on national economic performance.
The government has consistently implemented various policies each year to encourage economic activity through the Eid al-Fitr homecoming momentum.
These policies include transport ticket discounts compensated through subsidies and fiscal incentives, as well as the suspension of Value Added Tax (VAT) at 6 per cent for airline tickets during Lebaran 2025, which successfully reduced ticket prices by up to 14 per cent.
In addition, airport charges and aviation fuel prices were lowered at 37 airports to improve the affordability of flight services for the public, the Free Homecoming Programme to ease travel costs for society, and the Work From Anywhere (WFA) policy for civil servants since 2022–2025.
The WFA policy has become a strategic innovation that not only focuses on dispersing homecoming traffic density but also measurably extends the duration of homecomers’ stays in their hometowns.
He revealed that by continuing to carry out work and receiving full income, homecomers have more time to engage in activities and shopping, thereby driving increased money circulation and strengthening economic activity during the Eid al-Fitr period.
“Even with global pressures due to the Iran-Israel-US conflict, our economic fundamentals remain strong. In addition, the government is committed to not raising fuel prices at this time, so public purchasing power remains maintained. Therefore, for this year’s Eid al-Fitr, we predict the economy can be better than the previous year,” Haryo concluded.
For information, a 2023 study by the Central Statistics Agency (BPS) also showed that homecoming activity contributed around 1.5 per cent to annual national economic growth (yoy).
This contribution occurred through the redistribution of money flows from central economic activity areas to various regions, thereby expanding economic impacts and increasing money circulation more evenly.