Finance Minister Reports Real February Inflation at 2.59 Per Cent to Prabowo, Purbaya: Economy Not Overheating

JAKARTA – Finance Minister Purbaya Yudhi Sadewa contradicted concerns that Indonesia’s economy is overheating due to February inflation reported at 4.64 per cent.

He made this statement to President Prabowo Subianto during a Full Cabinet Session at the State Palace in Jakarta on Friday (13 March 2026).

According to Purbaya, the year-on-year inflation in February actually stands at around 2.59 per cent.

“The inflation data in February appears high, 4.64 per cent headline alone, Sir,” said Purbaya.

According to him, if the electricity subsidy component is excluded from the calculation, then February 2026 inflation does not reach 4.64 per cent.

“If we remove the electricity subsidy data from January-February last year, our inflation actually stands at only around 2.59 per cent, Sir,” he said.

Purbaya considered this explanation important for policymakers.

This is because if inflation is deemed too high, the government may adopt policies that restrain economic growth.

“This is important because if policymakers sometimes think the economy is overheating, they will tend to brake the economy,” said Purbaya.

He assessed that current inflation conditions still provide room for the economy to grow faster.

“So we remain safe to grow faster. The economy is not overheating,” he said.

The figures indicate that manufacturing activity is in an expansion phase.

“This is not data from BPS, but data from other sources confirming that our economy is indeed growing,” said Purbaya.