JAKARTA - Bank Indonesia (BI) still believes that inflation in 2026 and 2027 on an annual basis (year on year/yoy) will decline so that it is within the target range, responding to the high inflation that occurred in January 2026.
Based on data from the Central Statistics Agency (BPS), the annual Consumer Price Index (CPI) inflation in January 2026 was recorded at 3.55 percent (yoy), slightly increased compared to the previous month. This achievement passed the target range of 2.5 plus minus 1 percent or a range of 1.5 percent to 3.5 percent.
The Executive Director of the BI Communication Department, Ramdan Denny Prakoso, in his statement in Jakarta, quoted by Antara, Tuesday, February 3, conveyed that the central bank's optimism towards declining inflation was supported by the consistency of monetary policy and the close synergy of inflation control between BI and the government.
In addition, optimism is also supported by the strengthening of the implementation of the National Food Security Program and the end of the base effect due to low inflation in January 2025 due to the implementation of the electricity tariff discount policy.
More specifically, the monthly inflation in January 2026 was recorded as deflation of 0.15 percent (month to month/mtm).
This development is influenced by core inflation which is generally under control as well as deflation in the volatile food and administered prices groups.
Meanwhile, core inflation remained under control at 0.37 percent (mtm), slightly higher than the realization in the previous month of 0.20 percent (mtm).
The development of core inflation was influenced by the increase in global gold commodity prices, amid expectations that inflation would remain stable.
The realization of core inflation in January 2026 was contributed mainly by the inflation of gold jewelry commodities, house rent, and motorcycles.
On an annual basis, core inflation in January 2026 was recorded at 2.45 percent (yoy), up from the previous month of 2.38 percent (yoy).
Furthermore, the volatile food group experienced deflation of 1.96 percent (mtm), lower than the realization of the previous month which experienced inflation of 2.74 percent (mtm).
The deflation of the volatile food group was contributed mainly by red chili, sweet peas, and onions due to increased supply during the harvest season.
On an annual basis, the volatile food group experienced inflation of 1.14 percent (yoy), lower than the previous month of 6.21 percent (yoy).
"In the future, volatile food inflation is expected to be controlled supported by close synergy between Bank Indonesia together with the Central and Regional Inflation Control Team (TPIP and TPID) and the strengthening of the implementation of the National Food Security Program," said Ramdan.
The administered prices group also recorded a deflation of 0.32 percent (mtm), lower than the previous month's realization which experienced inflation of 0.37 percent (mtm).
The commodities that contributed to the monthly deflation of administered prices were mainly gasoline, air transportation tariffs, and intercity transportation tariffs due to the decline in the price of non-subsidized fuel and the normalization of mobility after the National Religious Holiday (HBKN) Christmas and New Year.
On an annual basis, the administered prices group recorded an inflation of 9.71 percent (yoy), higher than the previous month's inflation of 1.93 percent (yoy), mainly due to the base effect factor as the implementation of the 50 percent discount policy on household electricity tariffs in January-February 2025.
The English, Chinese, Japanese, Arabic, and French versions are automatically generated by the AI. So there may still be inaccuracies in translating, please always see Indonesian as our main language. (system supported by DigitalSiber.id)
