Annual Inflation Rises to 3.55% in January

JAKARTA, Investortrust.id — Indonesia’s annual inflation accelerated to 3.55% in January 2026 in Jakarta, exceeding the government’s state budget assumption, as a low base effect from electricity tariff discounts a year earlier pushed year-on-year prices higher, according to data released Monday by the Central Statistics Agency, or BPS.

The increase in annual inflation came despite a 0.15% month-to-month deflation, with the Consumer Price Index falling to 109.75 in January from 109.92 in December 2025, reflecting easing prices at the start of the year.

“At the beginning of 2025, electricity tariff discounts pushed the CPI down sharply, which lowered inflation at that time,” said Ateng Hartono, deputy for distribution and services at the statistics agency. “As a result, the comparison base is low, making year-on-year inflation in January 2026 appear higher.”

Food, beverages, and tobacco prices were the largest source of downward pressure on monthly inflation, falling 1.03% and contributing 0.30 percentage point to deflation, led by declines in chili peppers, shallots, chicken meat, and eggs.

Additional deflationary pressure came from gasoline prices and airfares, which each reduced headline inflation by 0.03 percentage point, BPS data showed.

By contrast, several commodities continued to post price increases, notably jewelry gold, fresh fish, and tomatoes, partially offsetting the broader decline in consumer prices.

Core inflation remained positive at 0.37% on a monthly basis, supported by higher prices for jewelry gold, housing rents, motorcycles, and prepared meals, indicating that underlying demand conditions remained intact.

Government-administered prices fell 0.32% from the previous month, while volatile food prices dropped sharply by 1.96%, amplifying the overall monthly deflation trend.

Regionally, 18 provinces recorded monthly deflation in January, with West Sumatra seeing the deepest decline at 1.15%, while 20 provinces still posted inflation, led by North Maluku at 1.48%.

Despite the monthly price correction, BPS said annual inflation pressures remain elevated largely due to statistical effects rather than new price shocks, underscoring the importance of base-year dynamics in interpreting current inflation data.