It was the first deflation this year after the inflation rate of Southeast Asia's largest economy rose 0.97 percent in January and 0.23 percent in February.

BPS head Suhariyanto said the deflation in March was a little outside of expectations as Bank Indonesia (BI) previously predicted inflation at 0.05 percent and several analysts also forecast a low inflation rate.

(Read also: February inflation tamed at 0.23% despite price hikes in volatile foods)

"Deflation occurred sharply by 0.66 percent in food commodities, coupled with declining prices by 0.13 percent in transportation, communications and financial services," he said in a press conference at the BPS headquarters on Monday.

Meanwhile, inflation in March occurred in processed foods, cigarettes, housing, clothing, health, education, sports and other components.

"The relatively sharp decline in food prices helped lower the effects of a previous electricity price adjustment and an increase in prices of certain types of fuel," Suhariyanto added.

The electricity price hike that spiked inflation in January was caused by a cut in government subsidies for 900 volt-ampere (VA) customers. (bbn)

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