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View all search resultsInflation surges to near three-year high amid Ramadan demand spike
Bank Permata chief economist Josua Pardede projected that headline inflation would remain above 3 percent in the first quarter of 2026 before moderating below 3 percent toward the end of the year.
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A grocery stall shopkeeper attends to customers on June, 1, 2024, at Rangkasbitung Market in Lebak, Banten. Prices for several staple foods have risen recently, including shallots from Rp 30,000 (US$1.85) to Rp 45,000 per kilogram and red chili from Rp 30,000 to Rp 50,000 per kilogram. (Antara/Muhammad Bagus Khoirunas)
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ndonesia’s inflation rate accelerated in February to its highest level in nearly three years, driven by a low base effect from the government’s electricity discount during the same period last year, as well as seasonal Ramadan impacts.
The consumer price index (CPI) rose 4.76 percent year-on-year in February, compared with a 3.55 percent annual increase recorded in the previous month, according to Statistics Indonesia (BPS).
The latest figure surpassed Bank Indonesia’s (BI) target range of 1.5 percent to 3.5 percent and marked the highest annual inflation rate since April 2023.
BPS official Ateng Hartono told a press conference on Monday that the surge in February’s inflation was driven by a “low base effect,” noting that the government’s electricity discount implemented from January to February last year had kept the CPI “below its normal trend”.
Ateng stressed that the high inflation recorded at the start of this year did not reflect a broad-based surge in cost pressures.
“[The low base effect] caused annual inflation in February to appear higher, though price dynamics remain relatively in line with the fundamental trend,” he said.
BPS data showed that February’s inflation was primarily driven by the housing, water, electricity and household fuel category, which recorded 16.19 percent growth and contributed 2.26 percentage points to headline inflation.
