Bank Indonesia confident inflation will remain contained during Ramadan 1447 H
Jakarta (ANTARA) — Bank Indonesia (BI) is confident that inflation will remain contained within the target range of 2.5 per cent plus or minus 1 percentage point — that is, between 1.5 per cent and 3.5 per cent — throughout the Ramadan period and up to Eid al-Fitr 1447 Hijriah.
“What are conditions like for Ramadan and Lebaran this time? Everything remains well contained. However, there is still an impact from administered prices due to the electricity discount that occurred last year, so we estimate the figure will be slightly above 3 per cent,” said BI Deputy Governor Aida S. Budiman during a press conference following the BI Board of Governors Meeting (RDG), held online in Jakarta on Thursday.
Regarding food conditions, Aida noted that supplies have been monitored and remain adequate. Additionally, the harvest season for horticultural commodities such as shallots, red chillies, and bird’s eye chillies is currently under way.
She confirmed that BI continues to conduct weekly price monitoring, and all indicators remain within the central bank’s projection range.
“So hopefully this will continue to be well maintained through March. January and February have been slightly elevated, but this is due to the impact of the electricity discount that occurred last year,” Aida said.
She added that going forward, BI will continue to strengthen coordination with the Central and Regional Inflation Control Teams (TPIP/TPID) and reinforce the implementation of the Inflation Control and Food Welfare Movement (GPIPS), with the aim of keeping volatile food inflation under control.
In January 2026, Consumer Price Index (CPI) inflation was recorded at 3.55 per cent year-on-year, higher than the previous month’s figure of 2.92 per cent year-on-year. This meant the figure slightly exceeded BI’s target ceiling.
“Slightly above our inflation target of 3.5 per cent. But this is temporary in nature,” Aida said.
BI noted that the increase was caused by a base effect from the policy of providing a 50 per cent discount on household electricity tariffs implemented in January and February 2025.
Meanwhile, core inflation remained low at 2.45 per cent year-on-year, in line with economic capacity that is still able to accommodate increased economic activity.
Volatile food inflation was also contained at a low level of 1.14 per cent year-on-year, supported by increased supply of red chillies, bird’s eye chillies, and shallots during the harvest period.
Looking ahead, BI is confident that annual inflation for 2026 and 2027 will decline and remain within the target range of 2.5 per cent plus or minus 1 percentage point.
Core inflation is projected to remain low, consistent with economic growth that is still below capacity, supported by the consistency of BI’s monetary policy rate in anchoring inflation expectations in line with targets, and imported inflation that remains under control.