BPS Reveals 50 Percent Electricity Tariff Discount Becomes Main Contributor To Deflation January 2025

Rupiah (photo: dock. Antara)

JAKARTA - The Central Statistics Agency (BPS) recorded a deflation in January 2025 which was recorded at 0.76 percent on a monthly basis or month to month (mom).

"In January 2025 on a monthly basis or MtM and the ytd calendar year there was a deflation of 0.76 percent or a decrease in the JCI from 106.80 in December 2024 to 105.99 in January 2025," said Plt. Head of BPS, Amalia Adininggar Widyasanti at the Press Conference, Monday, February 3.

Amalia said that deflation in January 2025 was the first deflation after the last September 2024.

According to Amalia, one of the main factors for deflation in January 2025 is the discount on electricity rates set by the government on compensation for the increase in Value Added Tax (VAT) rates to 12 percent.

Amalia said the 50 percent discount on electricity rates for PLN customers up to 2200 VA caused a deflation of 32.03 percent with a contribution to the consumer price index (IHK) of 1.47 percent.

"This deflation occurs due to a 50 percent discount for customers with electricity up to 2,200 VA in January 2025," he said.

Historically in the last 5 years, changes in electricity rates have also occurred in June and August 2022 due to electricity tariff adjustments in the third quarter of 2022.

Amalia emphasized that the recording of discounts in inflation calculations follows the Manual Consumer Price Index (CPI) which is a reference for world statistics offices, including BPS in calculating IHK

"This means that the discount is recorded in inflation calculations if the quality of goods or services is the same as normal conditions, the price of discounts can be obtained or available to many people," he explained.