The 2026 Eid al-Fitr holiday is considered a key driver of Indonesia’s economic growth during the first quarter of 2026. The government believes that increased household consumption and the annual homecoming flow could push economic growth to 5.5% or even higher.

However, INDEF Senior Economist Tauhid Ahmad estimates that economic growth in Q1 2026 will fall slightly short of the government’s target, reaching only around 5.4%.

This projection is based on the observation that this year’s Eid celebrations were less vibrant compared to previous years, limiting their impact on economic expansion.

“In my view, first-quarter growth will likely peak at around 5.4%. There is indeed a boost from Ramadan and Eid, but recent trends show a slight decline, especially compared to last year’s Eid,” Tauhid said in an interview with detikcom on Wednesday (March 25, 2026).

He added that the expected surge in consumption did not materialize as strongly as anticipated, resulting in a weaker economic boost compared to the previous year.

Tauhid further explained that the projected 5.4% growth is still supported by relatively expansionary government spending, particularly through priority programs and social assistance that help sustain household purchasing power.

“The main driver of this growth is ongoing fiscal expansion, including social assistance, MBG, and other programs aimed at maintaining purchasing power,” he noted.

On the downside, the lingering effects of natural disasters in Sumatra at the end of 2025 continue to impact economic activity into Q2 2026. At the beginning of the year, affected regions are still undergoing recovery, meaning their economies have not fully returned to normal and are dragging down the national average.

“These three provinces do have an impact, though not as significant as if it occurred in Java. Still, it contributes to why growth does not exceed 5.5%,” Tauhid said.

He also predicted that Aceh would record the lowest growth due to being the most severely affected region.

In addition, relatively high inflation has constrained consumer spending during Ramadan and Eid, reducing the overall economic stimulus from these events compared to previous years.

“The reason growth is below the government’s expectation is that consumption has been somewhat restrained due to high inflation, particularly from rising prices of essential goods ahead of Ramadan and Eid,” he emphasized.

Meanwhile, CELIOS Executive Director Bhima Yudhistira estimated that Indonesia’s economic growth in Q2 2026 would reach only around 5.05%, significantly below the government’s target, partly due to weaker-than-usual Eid activity.

“Ideally, growth could exceed 5.05%, but several challenges are holding back household consumption. For instance, many people are saving their holiday bonuses instead of spending them due to concerns over rising energy and food prices after Eid,” he said.

Moreover, limited job creation in urban areas is reflected in the lower-than-usual return migration flow. Combined with relatively high inflation at the start of the year, this has further suppressed consumption below expectations.

“The return flow has not been optimal due to limited job opportunities in cities, as job seekers typically move back to urban areas. Better inflation control before and after the holiday is needed so that bonuses can be spent more effectively. Job creation is also crucial to increase both the number and quality of returning migrants,” Bhima concluded.