Jakarta. Indonesia’s annual Eid homecoming travel, known locally as mudik, is emerging as a key driver of economic activity in early 2026, boosting household consumption and circulating cash more evenly across regions.

Officials and business groups estimate that money circulation during the Lebaran travel period could reach around Rp148 trillion ($8.71 billion), higher than last year, as millions of Indonesians return to their hometowns. The surge in mobility is expected to lift consumer spending by 10% to 15% during the festive season.

That momentum is likely to translate into stronger economic growth in the first quarter, with projections ranging between 5.4% and 5.5%.

“The Ramadan and Lebaran period has become a very significant engine for household consumption,” said Haryo Limanseto, spokesperson for the Coordinating Ministry for Economic Affairs, in a statement on Friday.

Haryo pointed to the latest weekly Mandiri Spending Index, which rose to 123.5, indicating a continued upward trend in consumer activity. He added that the spike in money circulation during both outbound and return travel periods has injected liquidity directly into regional economies.

The seasonal boost is expected to ripple across the real sector, strengthening production and distribution activity as businesses respond to rising demand. Higher consumption levels could also drive increased industrial capacity utilization and support job creation across multiple sectors.

“We are optimistic that businesses will begin to expand,” Haryo said. “Companies are expected to ramp up machine utilization and labor to replenish inventories that were absorbed during Ramadan and Lebaran.”

The government is also working to refine fiscal policy to ensure spending is more targeted and effective in sustaining growth while maintaining stability amid global uncertainty.

“On efficiency, this policy is still under intensive discussion. The goal is not merely to cut spending but to sharpen budget allocation so it is more effective,” Haryo said. “The state budget will continue to serve as a shock absorber in the face of global uncertainty.”

Authorities remain confident that the Eid travel season, supported by robust consumer spending and a positive response from businesses, will help keep Indonesia’s economic growth on a stable and sustainable path in the months ahead.