Arnoldus Kristianus, Jakarta – The Indonesian government will distribute Rp 50 trillion ($3 billion) in holiday bonuses, known as THR, to civil servants ahead of Eid al-Fitr. Payments will start at least three weeks before the holiday.
"Accelerating the THR disbursement for civil servants, with an allocation of around Rp 50 trillion, aims to significantly increase household purchasing power, strengthen domestic consumption, and drive economic activity across various sectors, particularly trade and services," Chief Economic Affairs Airlangga Hartarto said Monday.
THR is a legally mandated holiday allowance given to employees in Indonesia, typically disbursed ahead of Eid. The bonus is equivalent to at least one month's salary and is intended to help employees cover increased expenses during the holiday season.
Airlangga said the policy is expected to have a positive impact on macroeconomic stability and support Indonesia's economic growth targets for the first quarter of 2025. The government continues to implement strategic policies to achieve its growth target of 5.2 percent as stated in the 2025 State Budget (APBN).
"The government will continue to monitor individual consumption trends and the increase in public mobility during national religious holidays, such as Nyepi and Eid al-Fitr, which will stimulate economic activity and drive GDP growth in the first quarter of 2025," Airlangga added.
From a supply perspective, non-oil and gas industries, particularly food and beverage and textiles, are expected to increase production to meet the seasonal demand surge during Ramadan and Eid al-Fitr. Electricity consumption is also anticipated to rise, while wholesale and retail trade are projected to benefit from higher domestic demand.
On the demand side, the peak in household consumption during Ramadan 2025 will be a key driver of economic growth. The THR disbursement is expected to boost consumer spending, while electricity bill incentives will help households manage their expenses during the fasting month.
Consumer behavior in 2025
Public policy expert Achmad Nur Hidayat of UPN Veteran Jakarta said THR plays a major role in stimulating consumer spending ahead of Eid. The 2025 allocation for civil servant bonuses is slightly higher than the Rp 48.7 trillion disbursed in 2024. The government's decision to release THR earlier aims to ensure a more balanced cash flow throughout the holiday period, preventing excessive spending at the end of Ramadan.
"However, there are indications that people will be more selective in spending their THR this year," Achmad said.
In 2024, surveys showed that 67 percent of households allocated at least 25 percent of their THR for Ramadan and Eid shopping. However, in 2025, many households are expected to be more cautious due to economic uncertainties, opting to save or pay off debts instead of spending the full amount on holiday consumption.
"Consumer confidence has slightly declined at the start of the year, indicating a more cautious approach to large-scale spending. However, the retail sector remains optimistic," Achmad added.