Jakarta (ANTARA) - Bank Indonesia (BI) has explained that the \u201clow\nbase effect,\u201d resulting from the government\u2019s electricity tariff\ndiscount policy that induced deflation last year, has driven February\n2026 inflation to surge to 4.76 per cent year-on-year.<\/p>\n
\u201cWe must interpret this correctly. The 4.76 per cent inflation figure\nexists because administered prices in January and February 2025 received\nprice discounts,\u201d said Deputy Governor of Bank Indonesia Aida S. Budiman\nin Jakarta on Monday.<\/p>\n
From January to March 2025, the government-regulated price category\n(administered prices) recorded deflation, with the deepest decline\noccurring in February 2025 at minus 9.02 per cent year-on-year.<\/p>\n
By contrast, in February 2026, the same category experienced\ninflation of 12.66 per cent. This sharp difference is what has caused\nyear-on-year inflation to appear sharply elevated.<\/p>\n
Regarding the impact of national religious holidays, Aida explained\nthat inflationary pressure typically begins building before the\ncelebrations, peaks during the festivities, and subsides afterwards.\nGenerally, price increases during this period tend to be higher than in\nordinary months.<\/p>\n
The highest pressure typically occurs in the volatile food price\ncategory. These increases are driven by surges in seasonal demand that\ncan disrupt supply chains, making prices more prone to fluctuation.<\/p>\n
On the same occasion, Head of BI\u2019s Department of Economic and\nMonetary Policy Firman Mochtar added that the general trend in volatile\nfood inflation shows a decline.<\/p>\n
In February 2026, volatile food inflation was recorded at 2.5 per\ncent month-on-month and 4.64 per cent year-on-year. This figure, Firman\nnoted, remains within the target range of the Central Inflation Control\nTeam (TPIP), set below 5 per cent for the volatile food component.<\/p>\n
He stressed that going forward, BI is confident that inflation will\nremain controlled within a range of 2.5 per cent plus or minus 1 per\ncent. Additionally, BI remains committed to maintaining stability amid\npersistent global uncertainties whilst continuing to support economic\ngrowth.<\/p>\n
As part of its inflation control efforts, Firman also explained that\nBI maintains 46 representative offices across Indonesia, which\nstrengthen co-ordination of inflation control efforts with the central\nand regional governments through the Central and Regional Inflation\nControl Teams (TPIP and TPID).<\/p>\n
The bank is also working to ensure smooth distribution channels,\nincluding through inter-regional co-operation when supply shortages\noccur in particular areas, whilst reinforcing the management of\ninflation expectations to keep them well-anchored.<\/p>\n
\u201cWe are working to ensure food prices remain reasonable\u2014neither\nexcessively high nor too low. That is why we are targeting volatile food\ninflation at a maximum of 5 per cent. This is what we continue to manage\nand co-ordinate,\u201d said Firman.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/bi-low-base-effect-from-administered-prices-drives-high-february-2026-inflation-1772459919", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }