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Indonesians Splurge on Eid Holidays After Covid Restrictions End

Indonesians Splurge on Eid Holidays After Covid Restrictions End

Ayu, 31, is ready to spend two years’ worth of savings when she joins millions of Indonesians to travel home and freely celebrate Eid al-Fitr for the first time since the pandemic.

“I will finally know how the exodus feels like,” she said.

She has spared no expense, buying new clothes and traditional prayer garb known as “mukena” for herself and her family. When airfare tickets to her hometown in South Sulawesi doubled in price, she snapped them up. 

Indonesians Splurge on Eid Holidays After Covid Restrictions End

Like Ayu, Indonesians are splurging on everything from food and clothes to cars and hotel stays to mark the end of the fasting month of Ramadan. It’s the busiest holiday in the country with the world’s largest Muslim population. With Covid-19 cases down, most movement restrictions have been scrapped and the week-long holiday reinstated.

That spending spree is critical to the recovery of Southeast Asia’s largest economy, where the rebound in private consumption is expected to drive gross domestic product growth to 4.8%-5.5% this year. Indonesia will announce its first-quarter GDP figures on May 9, with a finance ministry official saying it could come in above 5%.

Indonesians Splurge on Eid Holidays After Covid Restrictions End

GDP Boost

With the specter of inflation looming over Indonesia, the seasonal uptick in spending is a welcome boost, especially as some economists expect further fuel price hikes to be rolled out after the holidays.

PT Bank Central Asia chief economist David Sumual sees the Eid festivities spurring consumption growth to 5.2% and GDP expansion to 4.8% in the second quarter.

“We still expect full-year growth to reach 5.17%,” said PT Bank Mandiri chief economist Andry Asmoro, adding that the holiday spending could contribute 0.14 percentage points to this number.

Travel Boom

The transport sector is set to be a major beneficiary when about 85 million people head to the provinces over the coming week -- making it one of the world’s largest annual migrations.

Vehicle sales jumped 16% year-on-year to the highest in nearly three and a half years. The state-owned toll operator said more than half a million cars left the capital Jakarta on April 22-25 to beat the upcoming rush where bumper-to-bumper traffic will typically last for hours.

Indonesians Splurge on Eid Holidays After Covid Restrictions End

Airlines are offering about 900 extra flights to cater to the overwhelming passenger demand. Indonesia’s aviation authorities projected a 239% annual surge in air traffic over the holiday period.

In Yogyakarta, PT Eastparc Hotel expects its revenue to be 20% higher this quarter as “family staycations” help boost its room occupancy, said director of marketing Wahyudi Sutoro.

“The government allowing the Eid exodus and bringing back joint leave days is very encouraging for us,” he said. The five-star hotel’s profit could double to 25 billion rupiah ($1.7 million) this year with the rebound in tourism, he added.

©2022 Bloomberg L.P.