Consumer prices rose a seasonally-adjusted 0.10% over the previous month in February, decelerating from January’s 0.26% increase. February’s result was driven largely by higher prices for transportation, health and household equipment.

Inflation moderated to 1.4% in February, from January’s 1.6%. February’s result therefore moved further below Bank Indonesia’s 2.0%–4.0% target range. Meanwhile, the trend pointed down slightly, with annual average inflation coming in at 1.8% in February (January: 1.9%). Core inflation came in at 1.5%, down from January’s 1.6%.

Commenting on the release, Nicholas Mapa, senior economist at ING, stated:

“We expect inflation to pick up only modestly in the coming months with base effects and higher energy prices nudging the headline rate higher. […] Despite price pressures staying subdued in early 2021, we do not expect Bank Indonesia (BI) to follow on from last month’s rate cut with additional easing given Governor Perry Warjiyo’s comments suggesting he is done cutting for now.”

FocusEconomics panelists project inflation of 2.4% in 2021, down 0.2 percentage points from last month’s forecast. In 2022, inflation is seen averaging 3.1%.