Jakarta. Indonesia’s annual Eid al-Fitr homecoming exodus is expected to deliver a significant boost to economic activity in 2026, as strong mobility and government stimulus drive consumption across the country.

The mass movement of people during the holiday period — known locally as mudik — has long been a key economic catalyst, generating broad multiplier effects across sectors. Historically, household consumption rises by 15%–20% compared with a typical month, supported by increased travel and faster circulation of money.

High marginal propensity to consume during the period further amplifies spending, with small and medium enterprises (SMEs) in regional areas often recording income gains of 50%–70%.

Data from the Central Statistics Agency (BPS) in 2023 showed that Eid homecoming activity contributed around 1.5% to annual economic growth, largely through the redistribution of income from urban centers to regional economies.

“Every rupiah spent by travelers creates a multiplier effect that benefits businesses, including SMEs, traders, and the transportation sector,” said Haryo Limanseto, spokesperson for the Coordinating Ministry for Economic Affairs. “This momentum is crucial for fostering inclusive and sustainable growth.”

For 2026, economic projections remain optimistic. The government expects higher mobility and spending compared with last year, when 154.62 million people traveled during the Eid period. Increased activity this year is seen as supporting Indonesia’s economic growth target of 5.5%–5.6% year-on-year.

The outlook is underpinned by a range of stimulus measures, including more than Rp 12.8 trillion ($754.6 million) in fiscal support, Rp 11.92 trillion ($702.7 million) in social assistance distributed to 5.04 million beneficiary households ahead of the holiday, and Rp 911.16 billion ($53.7 million) in transportation fare discounts.

With household consumption accounting for roughly 53%–54% of gross domestic product, these measures are expected to provide a meaningful lift to overall economic performance.

The government has consistently deployed policy tools to maximize the economic impact of the Eid exodus. These include subsidized discounts on public transport fares, a temporary 6% value-added tax (VAT) exemption on airline tickets during the 2025 holiday season — which reduced ticket prices by up to 14% — and lower airport service charges and aviation fuel prices at 37 airports to improve affordability.

Additional initiatives include free homecoming travel programs and the Work From Anywhere (WFA) policy for civil servants, implemented between 2022 and 2025.

The WFA scheme has proven particularly effective, not only in easing congestion during peak travel periods but also in extending the length of stay in hometowns. By allowing workers to remain productive while away, the policy has enabled longer spending periods, further accelerating money circulation in regional economies.

Despite global uncertainties, including tensions involving Iran and the United States, the government remains confident in the domestic outlook.

“Although there are global pressures, our economic fundamentals remain strong,” Haryo said. “The government is also committed to keeping fuel prices stable, which helps maintain purchasing power. We are optimistic that this year’s Eid period will deliver stronger economic performance than last year.”