February 5, 2026
JAKARTA – The government has brushed off the recent spike in headline inflation as a seasonal blip and price pressures to ease back in the coming months. Analysts, however, warn that a combination of bad weather, natural disasters and supply strains linked to the free nutritious meal program may keep inflation elevated well beyond the Idul Fitri holiday.
Statistics Indonesia (BPS) reported that annual inflation reached 3.55 percent year-on-year (yoy) in January, exceeding Bank Indonesia’s (BI) target range of 1.5 percent to 3.5 percent. The agency stated that the accelerated growth of the consumer price index (CPI) was largely caused by a low base effect after the figure fell below its normal trend in January last year because of electricity tariff discounts.
BPS projected that inflationary pressures linked to the low base effect could persist through February, as the country saw deflation in the same month last year. It noted that the volatile food component was one of the most significant contributors, adding 0.19 percentage points to overall inflation.
“The dominant contributors to volatile food inflation were rice, beef, broiler chicken and shallots,” BPS official Ateng Hartono said on Monday.
State-owned lender Bank Rakyat Indonesia (BRI) warned in a report published on Tuesday that while volatile food inflation remains relatively controlled, risks of higher price pressures persist ahead of Ramadan and Idul Fitri in March, which historically lift demand for food and certain services.
The bank’s team of economists suggested that recent price pressures were largely seasonal and temporary, echoing BPS’s assessment.
An inflation report by the Institute for Economic and Social Research of the University of Indonesia (LPEM UI), meanwhile, noted emerging demand-side pressures on protein-based food commodities, such as eggs and broiler chicken, particularly toward the end of last year.
The report also found that food inflation disproportionately burdened aspiring middle-class households, for whom food accounts for a larger share of consumption, while higher-income groups were more exposed to fluctuations in services and mobility costs.
Furthermore, supply-side shocks from natural disasters in Sumatra pushed up prices in the food, beverage and tobacco category, especially in the affected provinces of Aceh, North Sumatra and West Sumatra.
“Extreme weather has been quite disruptive. We need to monitor whether these conditions persist in the coming months,” LPEM UI economist Teuku Riefky said separately to The Jakarta Post on Tuesday.
He added that market operations, alongside efforts to boost food productivity, were among the most effective measures to maintain price stability and ease inflationary pressures.
Bhima Yudhistira, executive director of the Center of Economic and Law Studies (Celios), also argued that food inflation could accelerate sharply during the fasting month and the subsequent holiday period.
“We will likely see rising prices pushing up food inflation, possibly above 8 percent for volatile food during the Ramadan and Idul Fitri period,” Bhima told the Post on Tuesday.
He noted that extreme rainfall, flooding and landslides across several regions could disrupt the distribution of staple foods at a time when household demand typically increases, particularly for food crops.
“If food-producing areas, especially disaster-prone regions, are affected by flooding, the harvest season could be threatened, both for rice and other food crops such as vegetables,” Bhima said. “That would put pressure on the supply side and raise inflation risks.”
Concerns have also been raised over the sharp increase in the budget allocation for the free meals program, which is expected to be significantly expanded this year. Bhima warned that the program could crowd out food supplies from traditional markets during Ramadan and Idul Fitri.
“Our recommendation is to suspend the free meals program during the Ramadan and Idul Fitri period,” he said. “There is no need for the program during the fasting month, especially if meals are taken home. [The suspension] would help ease competition for food supplies and reduce pressure on household consumers.”
On the demand side, Bhima observed shifting consumption patterns, particularly among middle- and upper-income households, who are becoming more cautious amid broader economic uncertainty.
“Their focus has shifted toward food spending, especially after pressures in the stock market,” he said, adding that discretionary spending on leisure, travel and transportation may be reduced.
He attributed this behavior to expectations of rising prices, concerns over economic and geopolitical conditions, the impact of natural disasters in several regions and limited job creation, which together have constrained spending power. The reduction of incentives compared with last year, he noted, has also dampened spending ahead of Ramadan and Idul Fitri this year.
The government, meanwhile, is ramping up efforts to shore up food supply and spending power ahead of the holiday season.
Agriculture Minister Andi Amran Sulaiman, who also heads the National Food Agency (Bapanas), said the government would distribute rice and cooking oil aid to 33.2 million beneficiary households in a single tranche covering February and March, with a budget allocation of Rp 11.92 trillion (US$710.8 million) to fund the program.