BI: March 2026 Inflation Remains Controlled Thanks to Policy Consistency

Bank Indonesia (BI) views the Consumer Price Index (CPI) inflation for March 2026, which remains within the target range, as partly resulting from the consistency of monetary policy. Additionally, this achievement is supported by close synergy in inflation control between BI and the government, both central and regional, within the Central and Regional Inflation Control Teams (TPIP and TPID), as well as the strengthening of national food security programme implementation. Executive Director of BI’s Communication Department, Ramdan Denny Prakoso, stated in a release received in Jakarta on Thursday that going forward, Indonesia’s central bank is confident that inflation will remain controlled within the 2.5 ± 1 percent target for 2026 and 2027. Based on data from the Central Statistics Agency (BPS) released on Wednesday (1/4), the CPI for March 2026 recorded inflation of 0.41 percent (month-to-month/mtm), resulting in annual CPI inflation of 3.48 percent (year-on-year/yoy), a decrease compared to the previous month’s realisation of 4.76 percent (yoy). Furthermore, core inflation for March 2026 was recorded at 0.13 percent (mtm), lower than the previous month’s realisation of 0.42 percent (mtm). The development of core inflation was mainly influenced by the decline in global gold commodity prices and stable inflation expectations, amid rising demand during the National Religious Holiday (HBKN) of Eid al-Fitr. Annually, core inflation for March 2026 was recorded at 2.52 percent (yoy), down from the previous month’s inflation of 2.63 percent (yoy). Meanwhile, the volatile food group for March 2026 experienced inflation of 1.58 percent (mtm), a decrease compared to the previous month’s inflation of 2.50 percent (mtm). Inflation in the volatile food group was primarily contributed by commodities such as broiler chicken meat, rice, and broiler eggs, in line with increased demand during the HBKN Eid al-Fitr period. Annually, the volatile food group experienced inflation of 4.24 percent (yoy), lower than the previous month’s inflation of 4.64 percent (yoy). “Going forward, volatile food inflation is projected to be controlled, supported by close synergy between Bank Indonesia and TPIP and TPID, as well as the strengthening of the Inflation Control and Prosperous Food Movement (GPIPS) implementation,” said Ramdan. Meanwhile, the administered prices group for March 2026 experienced inflation of 0.31 percent (mtm), an increase compared to the previous month’s deflation of 0.03 percent (mtm). The inflation was mainly contributed by commodities such as petrol and intercity transport fares, in line with adjustments to non-subsidised fuel oil (BBM) prices and increased mobility during the HBKN Eid al-Fitr period. Annually, the administered prices group recorded inflation of 6.08 percent (yoy), lower than the previous month’s inflation of 12.66 percent (yoy).