Indonesia's Annual Inflation Hits 0.76% in January, Lowest Since March 2000
JAKARTA, investortrust.id - Indonesia's annual inflation rate slowed to 0.76% in January 2025, the lowest level recorded since March 2000, driven primarily by decrease in government-regulated prices like electricity, fuel and tobacco products.
The Central Statistics Agency (BPS) also reported a 0.76% month-on-month deflation in January, reversing the 0.44% inflation seen in December 2024. On a calendar-year basis, there was a deflation of 0.76%.
"Deflation occurred in January 2025, unlike the previous month and the same month in 2024, which experienced inflation," said Acting Head of BPS Amalia Adininggar Widyasanti at the BPS office in Jakarta on Monday, Feb 3, 2025.
"The monthly deflation in January 2025 was due to a decrease in the Consumer Price Index (CPI) from 106.8 in December 2024 to 105.99 in January." "In January 2025, the monthly and calendar-year deflation figures will be the same because the comparison is the same, namely December 2024," Amalia said.
Housing and Fuel Costs Drive Deflation
The monthly deflation in January 2025 was the first since September 2024. Amalia explained that the January 2025 monthly deflation was due to deflation in housing, water, electricity, and household fuel. "The housing, water, electricity, and household fuel group experienced a minus inflation (or deflation) of 9.16%," she said. "Meanwhile, the contribution to inflation was -1.44%."
The commodity that drove deflation in this group was electricity tariffs, contributing 1.47% to the deflation. "Other commodities that also contributed to deflation were tomatoes, with a contribution of 0.03%," she said. "In addition, cucumbers, train fares, and airfares each contributed 0.01% to deflation."
However, Amalia noted that some commodities still supported inflation. These commodities were red chili peppers and cayenne peppers, which contributed 0.19% and 0.17% to inflation, respectively. "Meanwhile, fresh fish, cooking oil, and gasoline each contributed 0.03% to inflation," she said.
Government-Regulated Prices Play a Key Role
Based on its components, the deflation that occurred in January 2025 was driven by government-regulated prices. This component experienced a deflation of 7.38% with a contribution of 1.44% to the deflation.
"The deflation in January 2025 occurred amid three notable events," she said. "First, the government provided a 50% electricity tariff discount for users with a power of 450 Volt Ampere (VA) to 2,200 VA, for two months, January and February 2025."
Second, there was an adjustment or increase in fuel prices. Pertamax, according to BPS data, experienced a price increase of Rp 150-400 (about $0.0094 - $0.025) per liter, or an increase of about 1-4%. Dexlite mostly increased by Rp 200, or 2%. Pertamax Turbo mostly increased by Rp 150, or 1%. Pertamina Dex mostly increased by Rp 100, or 1%.
Third, the government adjusted the retail selling price (HJE) of domestically made tobacco products. Based on Minister of Finance Regulation Number 97 of 2024, the HJE increase occurred for several types of cigarettes, including machine-made kretek cigarettes (SKM) by about 5-8%, machine-made white cigarettes (SPM) by about 5-7%, and hand-rolled kretek cigarettes (SKT) and hand-rolled white cigarettes (SPT) by about 10-19%.
"Meanwhile, the core component experienced inflation of 0.3% with a contribution of 0.2% to inflation," Amalia said. "Commodities that contributed to inflation included cooking oil, gold jewelry, house rental costs, ground coffee, cars, and motorcycles."
The volatile prices component also experienced inflation of 2.95%, with a contribution of 0.48% to inflation. Commodities that contributed to inflation were red chili peppers, cayenne peppers, and chicken meat.
Deflation in 34 Provinces
BPS noted that 34 provinces experienced deflation, and four provinces experienced inflation. The deepest deflation was recorded in West Papua at 2.29%. "Meanwhile, the highest inflation occurred in the Riau Islands, at 0.43%," she said.