Indonesian Households Go All Out During Eid, Wallets Already Exhausted

Jakarta, CNBC Indonesia - Ramadan and Eid al-Fitr are always synonymous with a surge in spending among Indonesian households. During this period, household consumption typically reaches its annual peak, driven by high demand for food, clothing, transportation, homecoming trips, and various other seasonal expenses.

This year, the trend was evident once again. In fact, consumer spending during Ramadan 2026 was recorded as stronger than the previous year.

According to the Focal Point Report from BCA Economic & Industry Research, the BCA Consumer Spending Index peaked in 2026 at 132.7.

This figure is higher than the Ramadan 2025 peak of 129.8 but lower than 2024’s 134.2. BCA also assessed that this year’s consumption peak arrived earlier and lasted longer than in the two preceding years.

At first glance, this data signals positivity, indicating that household consumption remains robust enough to support economic growth in the first quarter of 2026.

However, behind this surge, there are warning signals to heed. The high consumption during this year’s Ramadan is suspected not to be entirely driven by rising household incomes, but rather by households increasingly relying on savings to maintain elevated spending levels.

High Consumption Supported by Savings

The strengthening of consumption during this year’s Ramadan does not fully reflect healthy purchasing power.

In its report, BCA noted that the increase in consumer transactions last month appeared to be preceded by a decline in the saving rate, suggesting that consumption was more supported by reductions in household financial buffers rather than stronger income growth.

Indications are evident from the decreasing share of household ownership in financial assets and mutual funds.

In government securities (SBN), the portion fell from 12.3% to 11.8% in March 2026. Meanwhile, in equities or stocks, the portion dropped more sharply from 18.0% to 16.6%.

The slowdown in purchases of paper assets indicates that households are allocating more of their existing resources to consumption needs during Ramadan.

In other words, the public did indeed spend generously during this year’s Ramadan and Eid al-Fitr, but part of that spending is believed to have been financed by drawing down savings reserves. This makes the seemingly strong consumption on the surface leave major questions about its sustainability after Eid has passed.

Because when savings have already been used to support seasonal spending, the room for spending in subsequent months risks narrowing.

This situation also points to the potential for front-loading consumption, where households advance their spending to the Ramadan period. The risk of this pattern is the emergence of a consumption correction after Eid ends.

In the report, BCA stated that the moderation in consumer transactions post-Eid this year is still appearing better than in previous years, but it continues to show that after the consumption peak has passed, household spending begins to taper off.

On Eid day itself, the 2026 consumption index fell to 49.3, higher than 42.0 in 2025, then recovered to 69.4 afterwards. Although better than the previous year, the pattern still illustrates that post-peak consumption begins to adjust.

This means that the strength of Ramadan 2026 consumption does not automatically signify a genuine improvement in household finances. On the contrary, there is a risk that the public has already “gone all out” in spending during Eid, thereby limiting the driving force of future consumption.

Threats Looming on the Horizon

Household consumption issues do not end with thinning savings. Forward risks are even greater, particularly from the global oil price surge, inflationary pressures, and the possibility of adjustments to subsidised fuel prices.

Oil prices once touched US$116.37 per barrel, a 49.7% jump since the Iran war broke out.

This increase poses a threat to Indonesia as it can pressure government finances while also driving up living costs for the public.

At the same time, there are risks from food inflation. The government has signalled a potential annual decline in wet paddy harvest area of 3.87%. If supplies are disrupted, food prices will be harder to control, and public purchasing power could be further squeezed.

The most sensitive threat still comes from the possibility of adjusting subsidised fuel prices.

A moderate increase of 10-15% is estimated to add around 1.8-2.2% to inflation. In a situation where household savings are already eroded, such rises in living costs will clearly further constrict household spending room.

The government is still endeavouring to avoid this scenario through budget efficiency and spending reallocation.

However, if subsidy pressures continue to grow, fiscal manoeuvrability will become more limited. Ultimately, after the Ramadan consumption peak has passed, the biggest challenge is to prevent household spending from declining too sharply.

CNBC INDONESIA RESEARCH