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RI Deflation Due To Electricity Tariff Discounts, People's Purchasing Power Slows Do
Thursday, 06 Mar 2025
Indonesia experienced deflation in February 2025 of 0.48 percent month to month (mtm), and deflation of 1.24 percent year to date (ytd). The Central Statistics Agency (BPS) revealed that this deflation was caused by electricity tariff discounts.
The Executive Director of the Center of Economic and Law Studies (Celios), Bhima Yudhistira, assessed that deflation is a sign that public spending is slowing down. This means that this deflation shows that people are increasingly eating into their savings in line with declining personal savings
"Another indication is that people are holding back on spending in February to meet their needs during Ramadan-Eid. Hopefully, their shopping is only postponed, not that they don't want to shop," said Bhima when contacted by VIVA on Monday, March 3, 2025.
Bhima assessed that deflation should not affect electricity tariff discounts. Because the money that should be used to pay for electricity will be spent on other needs.
"Deflation should not be affected by electricity tariff discounts because the money saved from electricity costs should be spent by the public for other needs. If there is still deflation, it means that the money is indeed non-existent or is being saved," he said. Meanwhile, Staff for Economics, Industry and Global Markets from Bank Maybank Indonesia Myrdal Gunarto said that deflation in February was inseparable from the government's role in controlling prices. Myrdal asked not to worry that this deflation is a sign that there are no economic activities that can boost people's purchasing power. According to him, the Consumer Confidence Index (CCI) is currently still high. The January 2025 CCI was recorded at an optimistic level of 127.2. "In general, there is no need to worry if we look at it, because from the consumer confidence index side, we are still high. And on the other hand, the future inflation climate is also likely to be low," he added.
