Finance Minister States February 2026 Inflation at only 2.59 Per Cent without Electricity Discount

Jakarta – Finance Minister Purbaya Yudhi Sadewa has stated that inflation in February 2026 is projected to reach only 2.59 per cent year-on-year, assuming the government had not provided a 50 per cent electricity tariff discount throughout January-February 2025.

He explained that the spike in inflation to 4.76 per cent year-on-year in February 2026 is attributable to the electricity tariff discount issued the previous year. This discount created a low base effect, making household spending on electricity tariffs appear to have increased significantly.

“The overall inflation increase is primarily temporary due to the low base effect from the electricity discount in early 2025. Without the impact of the electricity discount, February inflation is estimated at only 2.59 per cent,” Purbaya stated during the APBN KITA Press Conference Edition March 2026 on Wednesday, 11 March 2026.

Based on component breakdown, Purbaya reported that core inflation increased by 2.63 per cent year-on-year, driven by rising gold prices and strengthened demand during Ramadan 1447 Hijri, which began in mid-February 2026. When segmented between gold and non-gold commodities, non-gold core inflation remained modest at around 1.4 per cent year-on-year.

“The importance of this core inflation figure lies in how external observers often focus on the 4.76 per cent headline figure, which leads them to suggest that the Indonesian economy is overheating and needs to be slowed down, when in fact we are only just beginning to experience faster growth,” he noted.

Purbaya also highlighted volatile food inflation, which increased by 4.64 per cent year-on-year due to weather factors and rising demand for specific commodities including chicken meat, fresh fish and chillies. He assessed this increase as moderate, remaining below 5 per cent year-on-year. Meanwhile, government-administered price commodities experienced the highest increase at 12.66 per cent year-on-year, primarily due to the low base effect from the electricity tariff discount, which is expected to begin moderating in March 2026.

“Overall, the impact of rising commodity prices, including crude oil, will continue to be managed by the government through the role of the state budget as a shock absorber, thereby protecting purchasing power and maintaining fiscal stability,” Purbaya concluded.