Jayanty Nada Shofa, Jakarta – Indonesia posted a 0.48 percent month-to-month deflation in February which the Central Statistics Agency or BPS attributed to the electricity bill discounts.

The government had halved the electricity bills for households with a power capacity of between 450 and 2,200 volt-amperes. This represents about 97 percent of the customers in Indonesia. The 50-percent discount was one of the economic stimulus packages aimed at offsetting the value-added tax increase. The discounts were available in the first two months of 2025. They also applied for both pre-paid and postpaid electricity bills. Prices are now back to normal.

"Electricity bills saw a 21.3 percent deflation, and they contributed to 0.67 percent in the [overall] deflation [in February]. This is all because of the 50-percent discounts," BPS' head Amalia Adininggar Widyasanti told a hybrid press briefing on Monday.

Other factors that contribute to the 0.48 percent deflation include declining prices of food products like broiler chicken meat and eggs, as well as red chili peppers – all of which had been witnessing soaring prices over the past months.

Red chili peppers – a key ingredient in Indonesian cooking – logged a whopping 7.31 percent deflation in February. This is much higher compared to boiler chicken meat (3.5 percent) and eggs (1.93 percent), BPS data shows. For context, broilers refer to chickens that are specifically bred for meat production.

"Shallots and tomatoes have already been facing deflation since January 2025 because supplies have already grown and surpassed that of the previous month," Amalia said.

The month-to-month deflation for shallots was at the double digits at 10.03 percent, while tomatoes reached 8.56 percent.

Source: https://jakartaglobe.id/business/electricity-discounts-cause-indonesias-048-pct-february-deflatio