Lingering Effects of Iran War: How Will the Economy Perform After Eid?

Jakarta — Indonesia’s economic growth in the second quarter of 2026, following the Eid period, is projected to face a slowdown.

Beyond the typical trend of economic deceleration after Eid al-Fitr, the effects of the Iran war are expected to begin affecting the domestic economy.

Prasasti Piter Abdullah, Policy and Program Director, stated that Indonesia’s economic challenges will emerge only after Eid 2026. “In the second quarter, disruptions from the global supply chain will have already occurred and be felt, because the impacts of the war will have begun to materialise,” he said last week.

“Meanwhile, what is yet to come has not arrived,” he clarified.

He added that overall economic growth in the first quarter of 2026 is projected to remain stable. “Although not as robust as in normal periods,” he noted.

The second quarter of each year is traditionally a challenging period. This is because it is a period of economic deceleration following Eid al-Fitr, which has stimulated economic activity among the population.

The economy following Eid will fundamentally demonstrate a downward trend.

On the other hand, the cascade of impacts from the war in the Middle East is beginning to reach Indonesia. “In the second quarter, I believe the economic slowdown will be more keenly felt,” he said.

Piter explained that Indonesia’s economic growth for the remainder of the year is heavily dependent on the government’s policy response in the second quarter of 2026. He emphasised that current conditions have not yet indicated a crisis.