Beritasatu Team, Jakarta – The number of travelers returning to their hometowns (mudik) for this year's Eid is expected to drop significantly, breaking a decade-long trend of increasing homecoming trips, except during the COVID-19 pandemic.
The Transportation Ministry's Policy Agency survey predicts that only 146.48 million people – 52 percent of Indonesia's population – will travel for the holiday, a sharp 24 percent decline from the 193.6 million who participated in Eid 2024.
"We did not delve into the main reasons for this decline, but we estimate that shifting social habits are affecting mobility patterns," said Budi Rahardjo, Head of Public Communication and Information at the Ministry, during the Investor Daily Talk on Beritasatu TV program recently.
Despite the drop, most movement remains concentrated on Java Island. Government data indicates that 55 percent of travelers originate from Java, while 70 percent of travel destinations are also within the island. Sumatra follows as the second-largest contributor, accounting for 21 percent of homecoming travelers.
Economic impact of the decline
The annual homecoming tradition is more than a cultural practice; it drives significant economic activity, particularly in transportation, tourism, retail, and household consumption. However, the Indonesian Chamber of Commerce and Industry (Kadin) predicts that economic circulation during Lebaran 2025 will contract by 12.28 percent, mirroring the decline in travelers.
"If money circulation reached Rp 157.3 trillion (around $9 billion) during Eid in 2024, it is expected to drop to Rp 137.98 trillion this year," said Sarman Simanjorang, Kadin's Deputy Chairman for Regional Autonomy Development.
Economic pressures, including widespread job losses and cautious spending among middle-class Indonesians, are believed to be major contributing factors. Recent layoffs across industries have exacerbated the situation.
"With economic uncertainty, people are saving rather than spending. The proximity of Eid 2025 to Christmas and New Year holidays may also be influencing travel decisions," Sarman added.
Changing trends, not just economic slowdown
Surakarta Mayor in Central Java Respati Achmad Ardianto attributes the shift to evolving social habits rather than economic distress.
"The trend is changing. With easy internet access, people are staying connected digitally, reducing the necessity of traveling home," he said, downplaying fears of an economic downturn.
However, economic analysts warn that a significant reduction in travel could have broader consequences. UPN Veteran Jakarta public policy expert Achmad Nur Hidayat highlighted the informal sector's vulnerability.
"Street vendors in terminals and traditional markets will feel the impact. The multiplier effect of Eid spending, from logistics workers to small businesses, will also take a hit," he explained.
Regions that typically see high financial circulation during Eid – such as Central Java, East Java, and West Java – are expected to experience the largest economic impact. Outside Java, Sumatra (especially Lampung and North Sumatra) and South Sulawesi also rely on the holiday season for economic boosts.
"Regions with stronger local economies, like Bali and Yogyakarta, may be more resilient due to their reliance on tourism and domestic consumption," Achmad said.
Macroeconomic pressures behind the decline
The decline in Eid economic activity coincides with broader macroeconomic challenges. Indonesia has experienced consecutive months of deflation in early 2025, signaling weak domestic demand.
According to the Central Statistics Agency (BPS), Indonesia recorded month-to-month deflation of 0.76 percent in January and 0.48 percent in February. February's annual deflation rate of 0.09 percent marked the first yearly deflation since March 2000.
"Even during economic hardship, people typically continue the Eid tradition. This year, however, spending restraint is more pronounced," said Nailul Huda, Director of Economics at the Center of Economics and Law Studies (Celios).
Rising unemployment is a major factor, with the Manpower Ministry reported over 18,600 layoffs in January and February alone – more than twice the previous year's rate. This has weakened consumer confidence and household spending.
"High layoffs are dragging down household consumption, as seen in the consumer confidence index (CCI). In January 2025, the index dropped 0.4 percent month-over-month, which is unusual for the start of the year," Nailul explained.
Weaker purchasing power raises concerns
Even with government incentives, such as toll road discounts and transport fare reductions, public response has been muted. This suggests that financial constraints, rather than just travel costs, are deterring homecoming trips.
"If people aren't traveling, they either can't afford it or prefer to save due to economic uncertainty," Nailul added.
Declining consumer spending is reflected in lower domestic value-added tax (PPN DN) revenue. The Finance Ministry reported PPN DN revenues of Rp 2.58 trillion in January 2025 – a steep drop from Rp 35.6 trillion in January 2024.
Celios estimates that GDP growth in Q1 2025 will be just 5.03 percent year-over-year, lower than the 5.11 percent recorded in Q1 2024.
"During Ramadan and Eid 2024, additional GDP contributions reached Rp 168.55 trillion. This year, that figure is expected to decline to Rp 140.74 trillion – a 16.5percent drop," Nailul revealed.
Government urged to intervene
Segara Research Institute Executive Director Piter Abdullah underscored the need for government intervention to prevent further economic downturns.
"Purchasing power is strained by rising living costs and labor market instability. Without targeted fiscal policies, economic weakness will persist," he warned.
Typically, Ramadan and Eid drive economic growth, but in 2025, the trend appears reversed. Consumer spending habits have shifted, with caution prevailing over celebration.
"The economy slowed after the Christmas and New Year holiday period. We expect Q1 2025 growth to be lower than Q1 2024," Piter concluded.
Source: https://jakartaglobe.id/business/mudik-drops-in-2025-what-does-it-say-about-the-econom