Lebaran Consumption Boosts Economy, 5.5 Percent Target Believed Achievable
Coordinating Minister for the Economy Airlangga Hartarto is optimistic that the national economic growth target of 5.5 percent for the first quarter of 2026 can be achieved thanks to increased consumer spending during Ramadan and Eid al-Fitr.
“It seems the 5.5 percent target can be achieved from the activity during last Ramadan,” said Airlangga after Eid al-Fitr prayers in Jakarta on Saturday (21/3/2026).
He also highlighted the inflation dynamics, which are likely to be higher than in 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.
Without that discount, he continued, household spending on electricity bills returns to normal levels, thus statistically recording higher inflation.
“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 is no 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 al-Fitr will maintain growth momentum.
The government targets national economic growth in the first quarter of 2026 to be 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, particularly during the Ramadan and Eid al-Fitr period.
To maintain consumer purchasing power and boost economic growth, the government has launched an economic stimulus package in the first quarter of 2026.
One of them is transportation incentives for Eid al-Fitr homecoming in the form of a 30 percent discount on train tickets, 30 percent on sea transportation, 100 percent on ferry services, and 17-18 percent discounts on flight tickets.
The estimated budget for transportation incentives reaches Rp 911.16 billion, sourced from the state budget (APBN) and non-APBN.
In addition, the government is distributing food assistance worth Rp 12 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.
The government is also allocating Rp 55 trillion for Eid al-Fitr allowances (THR) for around 10.5 million state apparatus, comprising civil servants (ASN), government employees with work agreements (PPPK), TNI and Polri, as well as pensioners.