BPS: Electricity Tariff Normalization and Gold Price Inflation Main Drivers of February 2026 Inflation

BPS-Statistics Indonesia recorded annual inflation of 4.76 percent in February 2026. The relatively high inflation rate was mainly influenced by the continuing impact of electricity tariff normalization in February 2026, following the 50 percent electricity tariff discount implemented by the government in February 2025. This condition is known as the low-base effect.

“During the implementation of the electricity tariff discount in January–February 2025, the Consumer Price Index for electricity tariffs declined to 68.40 in January and 53.83 in February. This situation resulted in annual deflation of 0.09 percent in February 2025, with electricity tariffs experiencing deflation of up to 46.45 percent,” explained Chief Statistician, Amalia Adininggar Widyasanti, in a written statement in Jakarta on Monday (2/3).

Meanwhile, in January and February 2026, electricity tariffs had returned to normal levels. As a result, the CPI for electricity tariffs appeared relatively stable and did not contribute to monthly inflation. However, because electricity prices had declined significantly during the same period in the previous year due to the discount policy, the year-on-year comparison shows a relatively high increase in prices.

According to Amalia, the electricity tariff discount policy implemented in early 2025 significantly lowered the overall price level and suppressed the CPI during that period. When the policy was no longer implemented in January and February 2026, prices returned to normal levels. The difference between the prices paid by consumers compared with the previous year was then recorded as an increase in the CPI, thereby pushing annual inflation to a higher level.

“Of the 4.76 percent annual inflation, 2.17 percentage points were contributed by electricity tariffs, which recorded inflation of 86.96 percent. This is referred to as inflation caused by the normalization of electricity tariffs following a low price base, commonly known as the low-base effect,” she explained.

Based on BPS data, the impact of the low-base effect is reflected in the high annual inflation recorded in the housing, water, electricity, and household fuels group, which reached 16.19 percent in February 2026, contributing 2.26 percentage points to overall inflation.

“BPS calculations show that if the 50 percent electricity tariff discount effect were excluded, or assuming that no electricity tariff discount had been implemented in February 2025, the inflation rate in February 2026 would have been around 2.54 percent,” Amalia stated.

With this explanation, the public is expected to gain a better understanding of the underlying factors behind inflation, enabling them to interpret inflation figures more accurately and appropriately.