Idul Fitri Inflation Declines, Celios: Consumers hold on to spending

Muslims break their fast during the Ramadhan Festival in Banda Aceh, Thursday (13/4/2023). Inflation in the month of Ramadan is quite low this year., JAKARTA — The inflation rate in April 2023 was recorded to be slightly sluggish even though it coincided with the momentum of Ramadan and Eid. BPS said inflation during this year’s Eid was lower than last year’s Eid.

Director of the Center of Economic and Law Studies (Celios), Bhima Yudhistira, said April inflation was quite an anomaly because Eid inflation is usually the highest throughout the year. But April inflation flattened despite volatile food prices.

“When inflation is low during the Eid period, food prices could be under control, but in fact the price of rice as the main contributor to inflation has increased, you could say that food prices are actually still volatile,” said Bhima, Wednesday (3/5/2023).

Meanwhile, inflation in the transportation services group rose sharply. According to Bhima, this is reasonable given the high demand for air, land and sea modes of transportation for homecoming purposes.

On the other hand, Bhima sees the reason for the sloping Eid inflation because core inflation in April was lower on an annual basis compared to March 2023. During Eid, consumers still refrain from shopping.

Bhima said the low consumption could be caused by several factors. One of them is that consumers are anticipating continued interest rate hikes and inflation that is still high.

“The government must be able to keep loan interest rates more affordable, especially consumption loans for both vehicle purchases and housing loans (KPR),” said Bhima.

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