BPS optimistic inflation returns to normal in April following low base effect
Jakarta — The Deputy of Statistics Distribution and Services at Indonesia’s Central Bureau of Statistics (BPS), Ateng Hartono, projects that year-on-year inflation will return to normal levels in April 2026 once the low base effect concludes.
He stated that this effect triggered surges in year-on-year inflation during January-February 2026 and is expected to end by March 2026.
“The low base effect will continue to impact year-on-year inflation in March, but it is possible it will end in March as well, so that in April 2026 the inflation figure will stabilise again with no low base effect,” he said in Jakarta on Monday.
Ateng explained that the low base effect phenomenon occurred due to government incentive policies implemented in the previous year.
During January-February 2025, the government provided a 50 per cent electricity tariff discount for residential customers on a broad scale. This massive discount significantly suppressed the consumer price index (CPI), pushing the national economy into deflation at that time. The low CPI position then became the reference point for calculating inflation this year.
“The decline in CPI caused the price level in January and February of 2025 to fall below the normal trend pattern,” said Ateng.
He explained that the impact of the excessively low inflation rate in early 2025, which even resulted in deflation due to the electricity tariff discount policy, is acutely felt when comparing CPI year-on-year in the same months in early 2026.
Because the base index for comparison from the previous year is too small and not operating within the normal trend, the increase in the percentage value of year-on-year inflation this year automatically rises significantly. This caused inflation in January and February 2026, recorded at 3.55 per cent yoy and 4.76 per cent yoy respectively, to appear very high.
“Nevertheless, price dynamics are broadly aligned with fundamental trends. This means that in the coming months, starting in April and beyond in 2026, we will return to the normal trend,” said Ateng.