Early Dry Season Arrival Prompts BI to Guard Against Food Inflation

Bank Indonesia anticipates a rise in volatile food inflation alongside the potential for an earlier dry season. This condition is assessed as posing risks to supplies and pushing up prices of staple goods.

Deputy Governor of Bank Indonesia Aida S. Budiman stated that inflation in the volatile food category requires serious attention. “Another matter that needs attention is volatile food, or the prices of fluctuating goods, because the BMKG has indicated the possibility of a drier dry season arriving earlier,” Aida explained on Wednesday (18/3/2026).

The volatile food category comprises food items with prices that fluctuate easily in the short term. Price movements are typically influenced by supply factors such as extreme weather, harvest seasons, and distribution.

Data shows that volatile food inflation reached 2.50% monthly in February 2026, reversing from 1.96% deflation in January. On an annual basis, inflation in this category surged to 4.64% from the previous 1.14%.

The inflation rise was driven by several key commodities, including broiler chicken meat, bird’s eye chillies, and red chillies. Increased demand during Ramadan and supply disruptions due to weather were the main contributing factors.

“So, this needs to be monitored, especially for horticultural commodities like chillies, as well as maize and rice,” Aida remarked.

Bank Indonesia assesses that pressures on volatile food must be anticipated through strengthening supplies and smooth distribution. These efforts are crucial for maintaining food price stability and controlling overall inflation.