March Inflation Predicted to Fall to Around 3.5 Percent, Eid al-Fitr and Fuel Price Effects in the Spotlight

Market participants are awaiting the official release of March 2026 inflation data by Statistics Indonesia (BPS), scheduled for announcement on Wednesday, 1 April 2026. The inflation rate for March 2026 is estimated to ease compared to the previous month.

Executive Director of CORE Indonesia, Mohammad Faisal, predicts that inflation for March will be around 0.6 percent month-to-month (mtm). On an annual basis, he projects inflation at 3.5-3.6 percent.

This figure is lower than the annual inflation for February 2026, which reached 4.76 percent. Faisal explained that the decline in annual inflation is influenced by a low-base effect from the electricity tariff discount policy at the start of 2025, which had driven an inflation spike at the beginning of 2026.

“After the discount period ended in February, March saw a month-to-month inflation surge,” Faisal said, quoted from Antara on Tuesday, 31 March 2026.

He added that monthly inflation pressures in March were also triggered by the Eid al-Fitr momentum and the increase in non-subsidised fuel (BBM) prices. Rising food prices and transportation costs during the homecoming season further amplified these pressures.

“Especially during Eid al-Fitr, food price components experienced increases, and transportation costs rose due to the homecoming season,” he added.

Furthermore, Faisal stated that CORE Indonesia supports the decision by the Minister for State Secretary (Mensesneg) Prasetyo Hadi not to raise subsidised or non-subsidised BBM prices. Holding prices steady is seen as able to reduce the impact of the US-Israel-Iran war on the national economy, particularly among vulnerable groups, namely the poor and lower-middle class.

“The policy to maintain their purchasing power is very important in this context, alongside the need to consider allocations for social assistance for emergency responses,” Faisal said.