CELIOS: The 2025 Lebaran period generated Rp140.7 trillion in GDP, down 16.5% compared with 2024

Purchasing power remains weak; CELIOS: First-quarter 2025 economic growth will be at most 5.03 percent

CELIOS: Ramadan and Lebaran consumption did little to support people’s purchasing power

Jakarta, March 28, 2025. 2025 could be a challenging year for Indonesians amid considerable economic pressure. One reason is the still-massive number of layoffs (PHK) in the first two months of 2025. Data from the Ministry of Manpower recorded 18,610 people laid off between January and February 2025. That figure was more than twice as high as in the same period in 2024. Indeed, according to KSPI data, 60,000 workers at 50 companies have already been laid off.

The widespread layoffs have weakened consumption, with the Consumer Confidence Index being one indicator. CELIOS Economics Director Nailul Huda said, “In January 2025, the Consumer Confidence Index fell by 0.4 percent month-on-month compared with December 2024. This is quite anomalous. Looking at the 2022–2024 period, the index usually rises in January because consumers are optimistic at the start of the year. Consumer confidence also weakened in February 2025.”

Other data show a similar trend, with the Real Sales Index (IPR) falling in January 2025. “In December 2024, the IPR stood at 222 points, then fell to 211.5 in January 2025. If we look at the movement from December 2023 to January 2024, it was still positive. This means consumers’ lack of confidence in the 2025 economy is also driving down our retail sales. As a result, people’s purchasing power has fallen further at the start of 2025,” Huda added.

Under these conditions, Huda said that the circulation of money during Ramadan and the Eid al-Fitr holiday would be weaker than last year. “The increase in narrow money supply (M1) during Ramadan and Eid al-Fitr 2025 is expected to weaken by 16.5 percent compared with the same period in 2024. The increase in money in circulation will be only Rp114.37 trillion. In 2024, the increase during Ramadan and Eid al-Fitr reached Rp136.97 trillion,” Huda added.

CELIOS Executive Director Bhima Yudhistira added that the decline in the increase in money in circulation during Ramadan and Eid al-Fitr this year would result in suboptimal national GDP growth. “Based on CELIOS’s modeling in 2024, the additional GDP generated by Ramadan and Eid al-Fitr reached Rp168.55 trillion. In 2025, it will be only Rp140.74 trillion, down 16.5%. Meanwhile, business owners’ profits will amount to only Rp84.19 trillion, far below last year’s additional income of Rp100.83 trillion,” Bhima said.

Another indicator of weakening purchasing power is the decline in the share of individual savings, which now accounts for only 46.4% of total third-party funds (DPK). This has never happened at the start of a previous administration. At the start of the Jokowi-JK administration, individual savings accounted for 58.5%, and under Jokowi-Amin, 57.4%. The falling share of individual savings indicates that people are increasingly having to draw down their savings to get by, because real wages are too low, benefits have been reduced, and the threat of layoffs continues.

“Based on these economic indicators, CELIOS estimates that economic growth in the first quarter of 2025 will be only 5.03 percent year-on-year. This is lower than the 5.11 percent growth recorded in the first quarter of 2024,” Bhima continued.

The growth estimate takes into account the impact of Ramadan and Eid al-Fitr 2025, which, as part of the seasonal cycle, boost household consumption compared with the fourth quarter of 2024. “However, seasonal factors, even when accompanied by the distribution of holiday allowances (THR), are still not enough to drive higher economic growth. There are even concerns that the economy will slow after Lebaran, as there will no longer be a significant driver of consumption. The government’s major spending cuts are also affecting consumer confidence. The weakening rupiah is making people more cautious about spending their money,” Bhima concluded.

Contact:

Nailul Huda (+62 95742232974)

CELIOS Release_Economy Ramadan-Lebaran 2025 Download