Alarm RI Activated! Economic Anomalies Ahead of Eid 2025

The think tank institution Center of Reform on Economics or CORE Indonesia revealed a number of data showing the irregularities or anomalies in Indonesia's economy ahead of Eid al-Fitr 2025.

This economic condition is emphasized by household consumption data, which contributes 54-5% to Indonesia's Gross Domestic Product (GDP), ahead of the Ramadan and Idul Fitri 1446 Hijri period.

The agency presented this anomaly data in a report titled "Beware of Consumption Anomalies Ahead of Eid 2025," which was published on March 26, 2025.

"Ramadhan and Eid in 2025 seem to not bring much blessing for household consumption. On the contrary, there are strong signals of anomalies in the purchasing power of the Indonesian people," quoted from the Main Findings section, Thursday (27/3/2025).

"The symptoms of household consumption anomalies leading up to Eid according to CORE Indonesia are captured from the deflation trend at the beginning of 2025. BPS recorded deflation again in February 2025, both on a yearly basis (-0.09%), monthly (-0.48%), and year to date (-1.24%). However, on an aggregate level, core inflation is still quite good at 0.25% (monthly) and 2.48% (yearly)."

According to the institution, the largest contributing factor to deflation indeed comes from the housing, water, electricity, and household fuel expenditure group, which was triggered by the 50% electricity tariff discount incentive provided by the government for middle-class households from January to February 2025.

However, oddly enough, deflation in February 2025 did not only occur in that expenditure group, but also in the food, beverage, and tobacco group, with a contribution of -0.12% on a monthly basis.

In 2024, this expenditure group contributed a monthly inflation of 0.29% in February and 0.41% in March. Meanwhile, in 2023,

'this group contributed to inflation on a monthly basis of 0.13% (February) and 0.09% (March).'

"However, approaching the month of Ramadan in previous years, the food, beverage, and tobacco groups have always contributed to inflation, although the upward pressure on prices is usually restrained by the harvest season that has already begun in February in some regions of Indonesia," according to CORE Indonesia.

In addition, CORE also contains data from Bank Indonesia regarding the Real Sales Index (IPR) in February 2025, which is projected to decline by 0.5% (yoy), influenced by a drop in sales of the Food, Beverage, and Tobacco Group (-1.7%).

Excluding the Covid-19 case in 2020-2021, IPR growth according to CORE has actually slowed down since 2017. Before 2017, IPR growth was always in double digits, but since 2017, IPR growth has stagnated below 5%.

"The slowdown in IPR growth since 2017 reflects increasing pressure on household consumption. The peak is the anomaly during Ramadan and Eid in 2025," wrote CORE in its report.

The weakening of sales growth in several retailers reinforces the results of the IPR survey conducted by Bank Indonesia. For example, the sales growth of Indomaret significantly slowed from 44.7% in 2022-2023 to only 4% in 2024. Alfamart, from 13.9% in 2022, was cut down to 10% in 2024. Likewise, Ramayana, from 8.1% in 2022, became only 0.1% in 2024.

"Slowdown also occurred in the upper-middle-class retail, such as Hypermarkets. Its sales growth was cut in half, from 4.8% in 2022 to only 2.3% in 2024. Matahari even saw its sales plummet (-2.6%) in 2024."

On the other hand, BPS also recorded that imports of consumer goods in February 2025 reached US$ 1.47 billion. This figure is 10.61% lower compared to imports in January 2025, which amounted to US$ 1.64 billion. When compared to the period of February 2024, imports leading up to Ramadan 2025 fell deeper, by -21.05%.

The tendency of the public not to return home during Eid 2025, according to CORE, is also one of the anomaly signals indicating the weakness of people's purchasing power. Movement Potential Survey.

The 2025 Eid Transportation Society of the Ministry of Transportation only recorded 146.48 million travelers, far below the number of travelers in 2024 which reached 193.6 million, a decrease of 24%.

"The decrease in the number of travelers during Eid 2025 also indicates a decline in disposable income among lower-middle-class households. As a result, many households have canceled their plans to return to their hometowns," said CORE.

In the report, CORE Indonesia also revealed the causes of the anomaly in consumption data leading up to Eid 2025, ranging from the surge in layoffs to the difficulty of finding work in the formal sector. This issue is an accumulation of early deindustrialization that has occurred in Indonesia.

"If the weakening purchasing power of the public leading up to Ramadan and Eid 2025 is allowed to continue, it could erode domestic economic performance and lower the quality of life for the general public. Low income, socially, can also trigger horizontal conflicts amid the increasing pressure of economic needs that are becoming more expensive," wrote CORE.

Source: CNBC Indonesia