Ria Fortuna Wijaya, Jakarta – Indonesia recorded deflation in January as food prices slid, but annual inflation accelerated on the back of electricity tariffs and rising gold prices, official data showed.
Data from the Central Statistics Agency (BPS) showed the Consumer Price Index (CPI) fell 0.15% month-on-month in January 2026, with the index easing from 109.92 in December 2025 to 109.75.
BPS Deputy for Distribution and Services Ateng Hartono said the monthly deflation was mainly driven by lower prices in volatile food items, supported by increased supply during the harvest season and lower non-subsidized fuel prices.
"In January 2026, we recorded a monthly deflation of 0.15%, mainly driven by the volatile food component," Ateng said during a press conference.
The food, beverages, and tobacco group was the largest contributor to deflation, declining 1.03% and contributing 0.30 percentage points to the overall monthly figure. The biggest price declines came from red chili, which contributed 0.16 percentage points to deflation, followed by bird's eye chili (0.08 points), shallots (0.07 points), broiler chicken meat (0.05 points), and chicken eggs (0.03 points).
Ateng noted that shallot production rose sharply in January, supported by peak harvests across major production centers, particularly in Brebes and surrounding areas as well as highland regions. Outside food, gasoline prices, and airfares each contributed 0.03 points to deflation, following Pertamina's January adjustment that lowered non-subsidized fuel prices. Electricity tariffs, meanwhile, remained unchanged from January through March 2026.
Despite the overall deflation, several commodities continued to exert upward pressure on prices. Gold jewelry recorded the largest inflation contribution at 0.16 points, reflecting continued increases in international gold prices into early January. Other items contributing to inflation included fresh fish (0.06 points) and tomatoes (0.02 points).
By component, volatile prices fell 1.96%, contributing 0.33 points to deflation, the largest among all components. Government-administered prices declined 0.32%, contributing 0.06 points, mainly due to lower gasoline prices, airfares, and intercity transport tariffs. In contrast, core inflation remained positive, rising 0.37% month-on-month and contributing 0.24 points, driven by gold jewelry, house rents, motorcycles, and prepared meals.
Regionally, 20 provinces recorded monthly inflation, while 18 provinces experienced deflation. N. Maluku posted the highest monthly inflation at 1.48%, while W. Sumatra recorded the deepest deflation at 1.15%. Aceh, N. Sumatra, and W. Sumatra all shifted into deflation in January after posting inflation in December 2025, largely due to falling food prices, with egg prices declining in Aceh and red chili prices easing in N. Sumatra and W. Sumatra.
On an annual basis, inflation rose to 3.55% year-on-year in January 2026, with the CPI increasing from 105.99 in January 2025 to 109.75. Ateng said the higher annual inflation was largely driven by a low base effect, stemming from the electricity tariff discount implemented in January and February 2025, which had pushed prices below their normal trend last year.
"Because the comparison base in early 2025 was relatively low due to the electricity discount, year-on-year inflation in January 2026 appears higher," he said.
The housing, water, electricity, and household fuel group recorded the highest annual inflation at 11.93%, contributing 1.73 points to headline inflation, with electricity tariffs as the dominant contributor. Outside housing, gold jewelry also made a significant contribution.
All major inflation components rose on an annual basis. Government-administered prices increased 9.71%, contributing 1.77 points, driven by electricity tariffs, PDAM water tariffs, and cigarette prices. Core inflation rose 2.45%, contributing 1.59 points, supported by gold jewelry, university tuition fees, house rents, and car prices. Volatile prices climbed 1.14%, contributing 0.19 points, mainly due to rice, broiler chicken meat, and shallots.
Regionally, all provinces recorded year-on-year inflation, with Aceh posting the highest annual rate at 6.69% and Lampung the lowest at 1.90%. Aceh, Southeast Sulawesi, and West Papua recorded the highest annual inflation rates, driven largely by electricity tariffs, gold jewelry, and rice prices.
BPS said that while annual inflation appeared elevated at the start of the year, underlying price dynamics remained broadly in line with normal trends, with the January spike largely reflecting statistical base effects rather than fresh price pressures.
Source: https://jakartaglobe.id/business/food-prices-drive-015-january-deflation-annual-inflation-reaches-35