BPS Reveals Causes of 4.76% Inflation, Cites 2025 Electricity Discount Effect
Jakarta — The annual inflation rate for February 2026 stood at 4.76%. At first glance the figure seems high, but the Indonesian Central Statistics Agency (BPS) emphasises there are technical factors that make inflation appear to surge relative to last year.
On a monthly basis, price pressures were comparatively contained. Inflation in February 2026 recorded at 0.68% month-on-month, reflecting an increase still in a seasonal pattern ahead of Ramadan.
Amalia Adininggar Widyasanti, Head of BPS, explained that the annual upturn was mainly influenced by the housing, water, electricity, and household fuels group.
‘February 2026 inflation on a monthly basis is relatively good at 0.68%. But year-on-year, 4.76%, with the largest contribution from the housing, water, electricity, and household fuels group,’ she said at the inflation coordination meeting on Tuesday (3/3/2026).
The main factor is not new tariff increases, but normalisation after the large discount provided by the government at the start of 2025.
‘This is because there has already been normalisation of electricity prices in February 2026 compared to February last year. On a year-on-year basis this group inflates 16.19% and its share is 2.26%,’ she explained.
She emphasised that there was no monthly electricity tariff change in February this year. The year-on-year rise was entirely due to the absence of tariff discounts this year.
‘In February 2026 there was no electricity tariff increase. But January–February 2025 had a 50% electricity discount for customers under 2,200 watts, so February 2025 experienced year-on-year deflation,’ she said.
BPS notes that February 2025 experienced annual deflation of minus 0.09% due to the policy discount. The low base of the Consumer Price Index (IHK) last year makes this year’s comparison appear higher.
‘Year-on-year inflation is calculated from February 2026 IHK of 110.50 compared to February 2025 of 105.48. That change is what yields 4.76%,’ Amalia added.
She added that if electricity tariffs had never been discounted, the index would have remained relatively flat through early 2026.
‘If there had been no electricity discounts and prices remained normal, the IHK electricity tariff would be 100.64 and would not change in January or February 2026,’ she asserted.
Thus, BPS confirms that the current annual inflation figure reflects mainly a statistical effect rather than a fresh price spike in the field.
‘That 4.76% mostly reflects the normalisation of electricity tariffs relative to the same month last year,’ Amalia concluded.