Government optimistic that Ramadan-Eid will drive 5.5 percent growth

Coordinating Minister for Economic Affairs Airlangga Hartarto is optimistic that the national economic growth target of 5.5 percent in the first quarter of 2026 can be achieved thanks to increased consumer spending during Ramadan and Eid.

“It seems the 5.5 target can be achieved from the vibrancy during last Ramadan,” said Airlangga when met after Eid al-Fitr prayers in Jakarta on Saturday.

He also highlighted the dynamics of inflation, which is likely to be higher compared to the first quarter of last year.

This is due to the absence of the 50 percent electricity tariff discount programme that previously suppressed inflation throughout January-February 2025.

“Last year up to February there was an electricity tariff discount. So that made last year’s inflation in terms of electricity deflationary. This year because there isn’t any (electricity tariff discount), the figure will be higher,” he said.

Although inflationary pressures are expected to increase, the government is optimistic that consumer purchasing power and increased consumption during Ramadan and Eid will maintain growth momentum.

The government targets national economic growth in the first quarter of 2026 to expand in the range of 5.5 percent to 5.6 percent (year-on-year/yoy). This target is driven by accelerated state spending, fiscal stimuli, and strengthened consumer purchasing power, especially during the Ramadan and Eid al-Fitr period.

One of them is transportation incentives for Eid homecoming in the form of a 30 percent train ticket discount, 30 percent sea transportation, 100 percent ferry services, and 17-18 percent aircraft ticket price cuts.

The estimated budget for transportation incentives reaches Rp911.16 billion from the state budget and non-state budget.

In addition, the government is also distributing food assistance worth Rp12 trillion to beneficiary families. The assistance consists of 10 kilograms of rice and 2 litres of cooking oil for two months, namely February-March 2026, to 35.04 million families.