Purbaya: Inflation Relatively Controlled Ahead of Eid al-Fitr

FINANCE Minister Purbaya Yudhi Sadewa stated that inflation remains relatively controlled ahead of the Eid al-Fitr period. The inflationary pressure in February 2026 is considered largely temporary as it is influenced by low base effects from 2025.

“Inflation in February is estimated to reach 2.59 per cent when not accounting for the electricity tariff discount that took effect in early 2025,” said Purbaya during a press conference on the APBN KiTa (Our National Budget) at his office in Central Jakarta on Wednesday, 11 March 2026.

Based on its component composition, he stated that core inflation, which accounts for approximately 65 per cent of the Consumer Price Index (CPI), was recorded at 2.63 per cent. Volatile food inflation, contributing 15.8 per cent, reached 4.64 per cent. Administered price inflation, with a contribution of 19.2 per cent, was recorded at 12.66 per cent.

According to Purbaya, core inflation experienced a slight increase driven by rising gold prices and strengthened demand during the National Religious Holidays (HBKN) Ramadan period. Inflation in the volatile food group also increased due to weather factors and rising demand during Ramadan, although it remained below 5 per cent.

Administered price inflation increased primarily due to the low base effect from the electricity tariff discount in early 2025. He forecast that inflation would moderate in March 2026. The data presented also demonstrated a correlation between world oil prices and inflation levels.

During periods of oil price spikes in the past, the government implemented three strategies to maintain fiscal sustainability, protect public purchasing power, and control inflation.

These strategies include the fiscal shock-absorber function through energy subsidies and compensation, provision of social protection such as direct cash assistance, additional social aid, and transport subsidies, and measured domestic price adjustments to maintain fiscal sustainability.