Ilona Estherina, Jakarta – The Center of Reform on Economics (CORE) has revealed several indications of subdued household consumption ahead of Eid 2025. In its report, CORE Indonesia noted that the consecutive deflation was not only caused by the discount on electricity tariffs as mentioned by the government.
The report titled CORE Insight: Beware of Anomalies in Consumption Ahead of Eid 2025' noted the early year deflation as an indicator of anomalies in household consumption. 'The sluggishness in Ramadan and ahead of this celebration is an anomaly that illustrates the disorder in Indonesia's domestic economy,' the CORE report published on March 26, 2025, stated.
BPS mentioned that the biggest factor contributing to deflation also came from the group of expenditure on housing, water, electricity, and household fuels, triggered by a 50 percent discount incentive on electricity tariffs from January to February 2025.
However, CORE evaluated that the deflation in February 2025 did not only occur in that expenditure group. Deflation also occurred in the group of food, beverages, and tobacco, with a share of minus 0.12 percent on a monthly basis.
'However, in the years preceding Ramadan, the group of food, beverages, and tobacco always contributed to inflation.'
Bank Indonesia also noted that the Real Sales Index (RSI) in February 2025 is estimated to decline by 0.5 percent year on year. According to the CORE report, the weakening growth of several retail sales reinforces the results of the RSI survey.
In line with the CORE report, entrepreneurs also confirmed the weakening purchasing power ahead of Eid 2025. The Chair of the Indonesian Shopping Center Management Association (APPBI), Alphonzus Widjaja, stated that the public's purchasing power has not recovered since Covid-19.
During this Ramadan season, APPBI revealed that sales in the retail sector are still expected to grow. However, the ongoing weakening of purchasing power has led entrepreneurs to believe that the growth will not be significant. Alphonzus predicted that retail sales in this year's Eid celebration will only grow by less than 10 percent. "It will grow but only in single digits," he said.
Meanwhile, he still believes that the level of public visits to shopping centers can still increase by 15 to 20 percent. "In this economic condition, people still visit shopping centers, the number hasn't decreased, but their shopping patterns have shifted," he said.