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Today's Headlines Idul Fitri
Typically, the Ramadan month and Idul Fitri week is a period of elevated inflation as people consume and travel more than usual amid the festivities. This year, however, inflationary pressures were remarkably low. According to the latest data of Statistics Indonesia (BPS), inflation reached 0.33 percent month-on-month in April 2023.
On Wednesday 6 April 2022 Indonesia Investments released the March 2022 edition of its monthly report. This report discusses key economic, political and social developments that occurred in Indonesia in the month of March 2022.
It was already known that –just like in 2020– the Indonesian government would ban the traditional mudik this year (mudik, which is a distinctive feature of Indonesian culture, refers to the exodus of millions of city-dwellers toward their places of origin where they typically spend a few days to celebrate the end of the Ramadan month).
It was already known that –just like in 2020– the Indonesian government would ban the traditional mudik this year (mudik, which is a distinctive feature of Indonesian culture, refers to the exodus of millions of city-dwellers toward their places of origin where they spend a few days to celebrate the end of the Ramadan month).
Indonesia’s inflation rate was unusually mild in May 2020. According to the latest data from Statistics Indonesia (BPS), the country’s consumer price index (CPI) stood at 0.07 percent month-on-month (m/m) only.
The extended Eid al-Fitr holiday is now over and everyone should be back at work per Monday (25/06). Indonesia's capital city of Jakarta is also, again, plagued by heavy traffic congestion. In fact, traffic congestion should be slightly worse than before the holiday because it is estimated that more than 72,000 newcomers settled in Jakarta after this year's Eid al-Fitr holiday.
The number of traffic accidents and casualties declined drastically during this year's Eid al-Fitr holiday, the celebrations that mark the end of the Ramadan month. Traditionally, tens of millions of people travel from the urban areas back to their places of origin to spend a couple of days with their families (a tradition known as mudik in Indonesia). This exodus at the start of the holiday (and inflow at the end of the holiday) usually leads to many casualties, primarily because people become tired after driving for many hours.
Stakeholders in Indonesia's food and beverage industry expect to see a 15 percent increase in sales during the Ramadan month and Idul Fitri celebrations (compared to normal conditions). Although the Ramadan is Muslims' fasting month, it is also a period when household consumption tends to rise sharply in Indonesia, specifically spending on food and drinks as well as clothes, bags and shoes grows significantly.
Indonesia's retail sales declined in July 2017 in line with the return to normal consumption patterns after the Ramadan and Idul Fitri celebrations ended. This is reflected in Bank Indonesia's retail sales index that showed a 3.3 percent decline year-on-year (y/y), after a 6.3 percent (y/y) increase in the preceding month. The decline in Indonesia's retail sales occurred in both food and non-food groups.
Normally the Ramadan month and Idul Fitri holiday (the celebration that marks the end of the Islamic fasting month) trigger an acceleration of economic activity as people consume more products (such as food and clothes), while the exodus of people from the cities to the rural areas during the week-long Idul Fitri (where they will spend a short holiday) causes a massive flow of money from the urban areas into the regional economies.
Latest Columns Idul Fitri
Although the holy fasting month of Ramadan and subsequent Idul Fitri celebrations always provide a boost for national economic growth in Indonesia as domestic consumption tends to peak, analysts believe that it will not contribute significantly to the government's 6.3 percent GDP growth target this year. During Ramadan and Idul Fitri (known as Lebaran), Indonesian consumers generally spend more on food products, clothes, shoes, tickets for transport and hotels than in other months, and thus lead to increased economic activity.
On the last day before a week-long holiday, Indonesia's main stock index (IHSG) rose by 0.36 percent to 4,640.78 points on Friday (02/08). Although it was a relative quiet trading day, the performance was in line with today's performance of other Asian indices as well as European and American indices on Thursday (01/08). Stocks in the country's basic industries sector provided most support to the rise of the index. The Asian market still felt the positive impact of the Federal Reserve's announcement that it will continue the quantitative easing program.
Last week (22-26 July 2013), Indonesia's main stock index (IHSG) ended 1.39 percent down at 4,658.87. The daily value of transactions on the regular market narrowed to an average of IDR 3 trillion (USD $300 million) from IDR 3.84 trillion in the previous week. Foreigners still recorded net sales amounting to IDR 92.9 billion (USD $9.3 million). Lack of positive sentiments, financial results of companies that were below expectation and the continued weakening of the rupiah against the US dollar resulted in the decline of the index.
Indonesia's central bank (Bank Indonesia) expects that economic growth of Indonesia in 2013 will not meet the government's target as has been set in the revised State Budget (APNB-P). Last month, both government and parliament of Indonesia agreed on a revised GDP growth assumption of 6.3 percent. However, Bank Indonesia believes that, due to slowing domestic consumption and investments in the current global economic context, the growth is more likely to fall between 5.8 and 6.2 percent.
