March Annual Inflation Nears Safe Limit, Bank Indonesia's Response

REPUBLIKA.CO.ID, JAKARTA — The Consumer Price Index (CPI) inflation for March 2026 was recorded at 0.41 percent month-to-month (mtm) or 3.48 percent year-on-year (yoy), a decrease compared to the previous month’s realisation of 4.76 percent (yoy). Bank Indonesia (BI) stated that this figure remains within the set target level. “The Consumer Price Index inflation for March 2026 is maintained within the target range of 2.5±1 percent,” said Head of BI’s Communication Department Ramdan Denny Prakoso in his statement on Thursday (2/4/2026). Denny explained that the inflation remaining within its target range is the result of consistent monetary policy and close synergy in inflation control between BI and the government (central and regional) through the Central and Regional Inflation Control Teams (TPIP and TPID), as well as strengthening the implementation of the national food resilience programme. Furthermore, he noted that core group inflation remains controlled. Core inflation for March 2026 was recorded at 0.13 percent (mtm), lower than the previous month’s realisation of 0.42 percent (mtm). “The development of core inflation was mainly influenced by the decline in global gold commodity prices and inflation expectations that remain stable amid increased demand during the National Major Religious Holiday (HBKN) of Eid al-Fitr,” he explained. On an annual basis, core inflation for March 2026 was recorded at 2.52 percent (yoy). This figure decreased from the previous month’s inflation realisation of 2.63 percent (yoy). Meanwhile, volatile food group inflation is also considered stable. The volatile food group in March 2026 experienced inflation of 1.58 percent (mtm), down from the previous month’s realisation of 2.50 percent (mtm). “Volatile food group inflation was mainly contributed by commodities such as broiler chicken meat, rice, and broiler eggs, in line with increased demand during the Eid al-Fitr HBKN period,” he clarified. On an annual basis, the volatile food group experienced inflation of 4.24 percent (yoy), lower than the previous month’s inflation of 4.64 percent (yoy). Denny stated that going forward, volatile food inflation is expected to remain controlled, supported by close synergy between BI and TPIP and TPID, as well as strengthening the implementation of the Inflation Control and Prosperous Food Movement (GPIPS). Next, the administered prices group recorded inflation. The administered prices group in March 2026 experienced inflation of 0.31 percent (mtm), an increase compared to the previous month’s deflation of 0.03 percent (mtm). Inflation in this group was mainly contributed by commodities such as petrol and intercity transport fares, in line with adjustments to non-subsidised fuel oil (BBM) prices and increased mobility during the Eid al-Fitr HBKN period. On an annual basis, the administered prices group recorded inflation of 6.08 percent (yoy), lower than the previous month’s inflation of 12.66 percent (yoy). “Going forward, Bank Indonesia is confident that inflation will remain controlled within the target range of 2.5±1 percent in 2026 and 2027,” he emphasised.