Economists predict higher March inflation, but still within target

Jakarta (ANTARA) - The Institute for Development of Economics and Finance (INDEF) projects that the inflation rate for March 2026 could be slightly higher than average, driven by inflation in food and energy commodities, but still within the government’s target range.

INDEF Executive Director Esther Sri Astuti stated that the price increases in these two commodities are partly influenced by heightened demand during the Ramadan and Idul Fitri 1447 Hijriah period, as well as the impact of global geopolitical turmoil.

“Due to the Ramadan and Eid effects, along with geopolitical conflicts, (the inflation rate for March 2026) will be slightly higher, but still within the corridor (of the government’s target of 2.5 percent plus or minus 1 percent),” said Esther Sri Astuti when contacted by ANTARA in Jakarta on Tuesday.

She explained that there are three types of inflation that could drive the increase in the Consumer Price Index (CPI) in March 2026, namely demand-pull inflation, cost-push inflation, and imported inflation.

She noted that demand-pull inflation occurs due to the high increase in demand for goods and services during the Ramadan and Eid period compared to normal days.

Meanwhile, cost-push inflation is partly caused by the rise in fuel oil (BBM) prices, which drives up transportation and logistics costs, thereby affecting production costs and leading to adjustments in the selling prices of goods and services.

“Additionally, this is due to geopolitical conflicts, which is called imported inflation. So, inflation that occurs because of inflation from outside (the country), fuel is difficult (due to the war in the Middle East), so what happens outside raises the prices of goods in Indonesia,” said Esther.

The Central Statistics Agency (BPS) is scheduled to announce the inflation report for March 2026 on Wednesday (1/4) at 11:00. Meanwhile, the annual inflation in January 2026 was recorded at 3.55 percent year-on-year (yoy) and 4.76 percent yoy in February 2026.

Regarding the fuel price increase, PT Pertamina (Persero) announced an update to fuel prices for certain regions effective from 1 March, with the non-subsidised Pertamax type rising to Rp12,300 per litre.

In Jabodetabek, the price of Pertamax (RON 92) fuel rose to Rp12,300 per litre from Rp11,800 per litre, as did Pertamax Green (RON 95), which increased to Rp12,900 per litre from Rp12,450 per litre in February 2026.